Brazil ethanol mill prices extend upward trend

04 March 2008 20:12  [Source: ICIS news]

SAO PAULO (ICIS news)--Brazilian ethanol mill prices continued to rise in the week ended 29 February due to heavy buying by fuel distributors for March material, research group Cepea said on Tuesday.

Cepea assessed anhydrous ethanol at Brazilian reais (R) 0.83666/litre ($1.89/gal), up by 1.8% from R0.82184/litre in the week ended 22 February. Meanwhile, hydrous ethanol was assessed at R0.74945/litre, up by 2.1% from R0.73388/litre in the previous week.

This was the fourth consecutive weekly price increase for anhydrous ethanol, and the fifth weekly hike for hydrous ethanol values, as assessed by Cepea.

The research group said the upward trend is chiefly due to robust demand for hydrous ethanol. February hydrous sales by Sao Paulo mills jumped by 65% compared with January.

The increase stems from ever-growing demand from flexible-fuel vehicles (FFVs). Sales of FFVs account for more than 87% of Brazil's automobile market.

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.

($1 = R1.68)

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By: William Lemos
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