30 April 2008 08:34 [Source: ICIS news]
SINGAPORE (ICIS news)--Asian hydrous ethanol values have risen $20-30/tonne on the back of tight spot supplies and increased offers from Brazil, the world’s largest ethanol exporting nation, said regional ethanol buyers and sellers on Wednesday.
There was a lack of May and June cargoes in the market and some Asian buyers, who had been waiting on the sidelines for a fall in prices, were now bidding higher, said a southeast Asian trader.
Fixtures at around $550/CBM ($685/tonne) CFR (cost and freight) Korea/Japan were heard some $20-30/tonne higher than in early April, said a South Korean buyer.
"The problem was that May and June cargoes were not available and the earliest shipments from Brazil would be for July arrival. This is keeping the market tight," he added.
Global ethanol prices usually soften in late April/ May once the sugarcane harvest starts in Brazil. However this year, heavy rains in the cane producing centre-south region had delayed the crushing and milling season.
Other regional sellers like Pakistan had mostly booked their May and June cargoes in March to more lucrative European destinations and little material was available there, regional ethanol traders said.
One Pakistani distiller said it had sold a 5,000-tonne extra-neutral alcohol (ENA) cargo at around $640-645/tonne FOB (free on board) Karachi this week. The cargo was bound for Europe as northeast Asian bids were falling short of these levels.
A correction in ethanol prices was unlikely in the second quarter and it may not be worthwhile to wait for values to fall as everyone did in early April, said Asian traders.
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