Brazilian ethanol prices firm despite ample supply

HOUSTON (ICIS)–Prices of hydrous and anhydrous ethanol remain firm in Brazil despite more offers seen in the market, as some plants need to get rid of inventories to make room for the new season fuel, an economic research group said on Tuesday.

Hydrous ethanol prices for the week of 22-26 February rose 0.81%, up to Brazilian reais (R) 1.9384/litre ($1.84/gal). Anhydrous ethanol rose to R2.0975/litre, ($1.99/gal), a 0.29% increase week on week, according to research done by the Centre for Advanced Applied Economics (CEPEA) in Sao Paulo. No taxes are included in the CEPEA figures.

Since early February, distributors’ interest in buying ethanol has been weak, driven by the expected increase in supply caused by the beginning of the 2016/2017 harvest season during first half of March, the group said.

In addition, the loss of biofuel’s competitiveness compared to gasoline, along with fewer working days this month, pushed volume traded, according to CEPEA.

Brazil also produces ethanol in the northeast region of the country. The sugarcane harvest in that area runs from September to March.

($1 = R3.98)