Brazil flex car sales boost ethanol demand

05 June 2008 22:33  [Source: ICIS news]

(Recast for clarity)

HOUSTON (ICIS news)--Brazil’s automobile association Anfavea said on Thursday that flexible-fuel vehicle (FFV) sales in May rose by 20% from one year earlier, creating more potential demand for ethanol.

Brazil’s ethanol consumption has surpassed that of gasoline in 2008 due chiefly to demand for hydrous ethanol from FFVs.

Brazil also blends anhydrous ethanol in gasoline at 25%.

Anfavea said local automakers in May sold 201,359 FFVs, up from 167,689 vehicles one year earlier and down from 216,838 units in April.

FFVs accounted for 87.6% of Brazil’s automobile sales in May. That figure compares with 87.5% in April and 83.8% in May 2007, Anfavea said.

FFVs can run on gasoline or hydrous ethanol, but most FFV drivers in Brazil fill up with ethanol because the biofuel is more affordable than gasoline.

A producer said monthly ethanol demand in May might have jumped back to 1.6bn litres (423m gal) based on preliminary data that put consumption at about 750m litres in the first half of the month.

Demand was stronger in the second half of May, the producer said, indicating that ethanol consumption for the full month may have more than doubled.

Brazilian ethanol demand peaked in December 2007 at 1.61bn litres, with more than 1bn litres of that amount in hydrous ethanol, according to figures from the National Petroleum Association (ANP).

Brazilian ethanol consumption in April totalled 1.56bn litres, a 37% increase from 1.14bn litres one year earlier, the ANP said. April consumption was also up by 2.6% from 1.52bn litres in March.

Brazil is the world’s second-largest ethanol producer, after the US, as well as the top exporter of the biofuel.

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By: William Lemos
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