Brazil ethanol exports to drop 34.5% in 2010-11 - trade group

31 March 2010 19:20  [Source: ICIS news]

HOUSTON (ICIS news)--Brazil’s ethanol exports will drop by 34.5% in the 2010-2011 crop year, industry association Unica said on Wednesday, projecting shipments of 1.80bn litres over the next 12 months.

Brazil shipped 2.75bn litres of ethanol in the previous year, according to the association.

Unica did not give a reason for the drop, but market participants said the steep decline was due to a closed arbitrage window with the US, the main market for Brazilian ethanol in recent years.

Unica downplayed the expected reduction, saying Brazil’s flexible-fuel vehicle (FFV) market would pick up most of the slack from lost exports.

“Motor vehicle sales remain strong, with [FFV] vehicles accounting for more than 90% of light vehicle sales in Brazil,” Unica said.

Projections indicated that by the end of the 2010-2011 harvest, Brazil’s FFV fleet would account for 49% of the country’s total fleet, the association said.

FFVs make up 40% of the total fleet now, according to Unica.

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By: William Lemos
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