Brazil ethanol prices fall on weaker demand

06 September 2011 21:05  [Source: ICIS news]

HOUSTON (ICIS)--Brazil ethanol prices fell in the last week of August on softer spot demand, research group CEPEA said on Tuesday.

CEPEA assessed anhydrous ethanol at Brazilian reais (R) 1.3962/litre ($3.20/gal), down by 2.5% from R1.4321/litre in the week ended 26 August.

Hydrous ethanol was assessed at R1.2236/litre, down by 1.9% from R1.2468/litre a week earlier, the research group said.

Brazil uses hydrous ethanol as a stand-alone fuel in flexible-fuel vehicles (FFV), competing directly with gasoline.

Anhydrous ethanol is blended in gasoline at a mandated 25%, but the blend requirement will drop to 20% on 1 October because of increasingly tight supply in Brazil's key centre-south sugarcane region.

Brazilian ethanol production in the centre-south fell by nearly 20% in the 2011 crop year to 16 August, according to the latest figures from sugarcane industry group Unica.

The sugarcane harvest in the centre-south runs from April to November/December.

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

($1 = R1.65)

For more on ethanol visit ICIS chemical intelligence

By: William Lemos
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