Brazil hydrous ethanol prices drop on weather

13 May 2008 22:07  [Source: ICIS news]

HOUSTON (ICIS news)--Brazil’s hydrous ethanol prices dropped in the week ended 9 May, as mills in the key centre-south region resumed production amid dry weather, research group Cepea said on Tuesday.

Cepea assessed hydrous at R0.7498/litre ($1.71/gal), down by 2% from R0.7659/litre in the previous week.

Heavy rainfall in the centre-south region in recent weeks had interrupted the restart of several ethanol mills in the area, which accounts for more than 85% of Brazil’s production of the biofuel.

Centre-south mills operate from April to November, the months that coincide with the sugarcane harvest in the south of Brazil.

Cepea assessed anhydrous ethanol at R0.8301/litre, up from R0.8022/litre a week earlier. The increase was supported by strong demand and steady supply, the research group said.

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

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 = R1.66)

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By: William Lemos
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