Brazil anhydrous ethanol prices rise on tight supply

07 September 2010 16:17  [Source: ICIS news]

HOUSTON (ICIS)--Brazil’s anhydrous ethanol spot prices rose in the week ended 3 September, data from research group CEPEA showed on Tuesday, an increase market sources attributed to tight supply.

CEPEA assessed anhydrous ethanol at Brazilian reais (R) 0.9971/litre ($2.18/gal), up by 3.0% from R0.9679/litre in the week ended 27 August.

Hydrous ethanol was assessed at R0.8358/litre, largely steady with R0.8316/litre in the previous week, the research group said.

According to sources, anhydrous ethanol supply is tight because producers in Brazil have increased sugar production this year due to high prices on that side of the market.

By increasing sugar production, sugarcane mills have curtailed the output of anhydrous ethanol, which competes directly with sugar.

Brazil blends anhydrous ethanol in gasoline at a mandated 25%, while hydrous ethanol is used as a stand-alone fuel.

CEPEA prices are ex-tank and do not include taxes.

($1 = R1.73)

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By: William Lemos
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