Report Summary 1. Report Industry Investment Rating No information provided. 2. Core View of the Report The report reveals a complete transmission chain of "rising crude oil prices → rising gasoline prices → rising Brazilian ethanol prices → rising Brazilian sugar prices." The sharp rise in crude oil prices will significantly impact Brazilian sugar production, especially as the new sugar - cane crushing season starts on April 1st. Current high crude oil prices will greatly influence sugar mills' production decisions, potentially leading to a reduction in sugar output [20][23]. 3. Summary by Relevant Catalogs Overview - Since 2026, due to factors such as the escalation of the Middle - East geopolitical conflict and the interruption of shipping in the Strait of Hormuz, international crude oil prices have soared, with Brent crude oil prices exceeding $120 per barrel. Historically, there is a high long - term correlation between crude oil and raw sugar prices [2]. - The Strait of Hormuz remains closed, disrupting global crude oil trade. Its normal daily oil transport volume is about 20 million barrels, accounting for 25% - 30% of global seaborne oil trade and about 20% of global oil consumption. Future crude oil price trends will greatly affect sugar prices [2]. Relationship between Crude Oil Price and Brazilian Gasoline Price - Crude oil is the core raw material for gasoline production, accounting for over 70% of gasoline production costs. Rising crude oil prices lead to increased raw material costs for refineries, which then pass on the cost pressure to end - user gasoline prices [3]. - Although gasoline in Brazil is market - priced, Petrobras, as the largest refiner, controls about 70% of crude oil, 90% of natural gas, and 98% of refining capacity in Brazil, having strong pricing power in the wholesale market. The government makes comprehensive pricing decisions considering domestic costs, market competition, inflation, and people's livelihood. Under Petrobras' price control, Brazilian gasoline prices have not significantly increased in March 2026, with international Brent crude oil rising over 40% and Brazilian gasoline only rising 0.65% during the same period [6]. Relationship between Brazilian Gasoline Price and Brazilian Ethanol Price - Brazil is the world's largest producer and consumer of sugar - cane ethanol. Ethanol, as an important alternative fuel and blending component for gasoline, has a strong price linkage with gasoline. The implementation of the E30 ethanol - gasoline policy in Brazil since August 1, 2025, makes ethanol and gasoline in direct substitution competition. Rising gasoline prices drive up ethanol demand and prices [8][10]. - When crude oil prices rise significantly, the demand for ethanol as a substitute for gasoline increases, and ethanol prices follow. The market generally uses 0.7 as the critical value for the ethanol - gasoline ratio. When the ethanol price does not exceed 70% of the gasoline price, consumers prefer ethanol, increasing its demand and price [11]. Brazilian Ethanol Price Increase Leading to a Chain Increase in Sugar Price - Brazil is the world's largest sugar producer and exporter, accounting for over 70% of global sugar exports. Brazilian sugar - cane can be used to produce both sugar and ethanol, and sugar mills can adjust the production ratio (sugar - ethanol ratio) according to the price ratio of ethanol to sugar. Rising ethanol prices prompt sugar mills to increase ethanol production and reduce sugar production, leading to a decrease in sugar supply and an increase in sugar prices [15]. - As of March 13, the Brazilian ethanol - equivalent sugar price is about 16.48 cents per pound, while the ICE raw sugar settlement price is 14.41 cents per pound, indicating that producing ethanol is more advantageous [16]. Conclusion - The sharp rise in crude oil prices since March 2026 will gradually be transmitted to Brazilian domestic gasoline prices, then to ethanol prices, and finally cause sugar mills to significantly adjust their production ratios. Hedgepoint estimates that the sugar - cane - to - sugar ratio is expected to be 48.6%, a 2 - percentage - point decrease. StoneX analysts believe that Brazilian sugar mills will prioritize ethanol production in the early 2026/27 crushing season, further reducing sugar output [20][23].