Brazil ethanol prices drop on supply pressure

10 June 2008 21:14  [Source: ICIS news]

HOUSTON (ICIS news)--Brazil’s ethanol mill prices continued to drop in the week ended 6 June, pressured by sustained supply of the product in the domestic market, research group Cepea said on Tuesday.

Cepea assessed hydrous ethanol at Brazilian reais (R) 0.6327/litre ($1.46/gal), down by 1.0% from R0.6392/litre in the previous week. Anhydrous ethanol was assessed at R0.7876/litre, down by 1.8% from R0.8018/litre a week earlier.

Brazil uses hydrous ethanol as a stand-alone fuel and blends anhydrous in regular gasoline at 25%.

Cepea said supply in Brazil remained ample despite heavy rains in parts of Sao Paulo, a key-producing state.

Ethanol output usually drops during periods of continued rains because of the impact the weather can have on the amount of sugarcane processed at the mill.

Cepea’s price assessments are ex-tank and 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 = R1.63)

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By: William Lemos
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