16 August 2011 20:35 [Source: ICIS news]
PORTO ALEGRE, Brazil (ICIS)--Brazil-based energy producer Petrobras has left open the option of importing more ethanol in order to avoid a local shortfall.
"If there's need to import more ethanol, we will import it", Petrobras finance and investor relations director Almir Barbassa said on Monday.
Brazil resorted to imports of ethanol earlier this year for the first time in several years to avoid a potential shortage of anhydrous ethanol, which Brazil blends in gasoline at a mandated 25%.
Also, Brazil uses hydrous ethanol for flexible-fuel vehicles (FFV).
Ethanol supplies tightened because domestic production had not kept up with demand, leading to a jump in prices earlier this year.
In the third week of April, anhydrous ethanol prices were assessed at Brazilian reais (R) 2.73/litre ($6.50/gal, €1.18/litre) in the week ended 22 April, a 10% jump from R2.47/litre a week earlier. Hydrous ethanol was assessed at R1.46/litre, up by 5% from R1.38/litre in the previous week.
Prices had since fallen, reaching R1.3079/litre for anhydrous ethanol in the first week of August. Hydrous ethanol was assessed at R1.1366/litre.
Ethanol supply has increased since the start of Brazil's main sugarcane harvest in April, but a drop in sugarcane production so far this year has raised concerns that local ethanol production alone will not be enough to meet demand.
According to sources, ethanol supply could tighten further in the coming months because of a smaller-than-expected sugarcane harvest in the key centre-south region.
Total sugarcane crushing from the beginning of the harvest on 1 April to 16 July totalled 217.4m tonnes, down by nearly 15% from 255.2m tonnes processed over the same period in the previous harvest, industry association Unica said in a recent crop update.
Additional reporting by William Lemos
($1 = R1.59)
($1 = €0.69)
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