Brazil ethanol mill prices fall amid slow market

08 January 2008 20:39  [Source: ICIS news]

HOUSTON (ICIS news)--Brazilian ethanol mill prices remained on a downward trend in the first week of 2008 amid lacklustre market activity, research group Cepea said on Tuesday.

Cepea assessed anhydrous ethanol at Brazilian reais (R) 0.82621/litre ($1.79/gal) during the week ended 4 January. That compares with R0.83400/litre a week earlier.

Hydrous ethanol was assessed at R0.73306/litre last week, down from R0.73701/litre in the week ended 28 December.

Cepea’s price assessments do not include a federal tax of 3.65% levied on both hydrous and anhydrous product. A state tax of 12% is also applied to hydrous ethanol in Sao Paulo.

Brazil uses hydrous ethanol as a stand-alone fuel, while anhydrous ethanol is blended in gasoline at 25%.

Cepea said it expects Brazilian ethanol demand to remain strong in 2008 amid continued growth in the flexible-fuel (FFV) market.

FFVs can run on gasoline or stand-alone hydrous ethanol.

FFV sales in 2007 totalled 2m units, a 40% increase from 1.43m vehicles sold in 2006, according to industry association Anfavea.

Cepea said industry projections indicate Brazil’s FFV sales would grow by another 20% in 2008.

($1.00 = R1.75)

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By: William Lemos
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