Brazil 2011 ethanol output to drop 20% as harvest winds down

01 November 2011 22:15  [Source: ICIS news]

HOUSTON (ICIS)--Brazil sugarcane industry association Unica on Tuesday released a new estimate for the 2011-2012 centre-south sugarcane crop, estimating that ethanol production this year will drop by nearly 20% to 20.4bn litres.

The centre-south accounts for 90% of Brazil's ethanol production. The sugarcane harvest in the area runs from April to November/December.

Unica also cut sugarcane production estimates, predicting output in the centre-south this year will fall by 12.3% from the previous year to 488.5m tonnes/year.

The reduction stems from lower sugarcane yields, which have dropped by 18% compared with the previous harvest, the Brazilian group said, citing poor weather conditions in 2011 as one of the reasons behind the drop.

The decline in ethanol production so far this year has forced Brazil to import ethanol from the US.

Ethanol imports in April-September totalled 568m litres, Unica said, adding that total imports for this harvest are expected to reach 1.2bn litres.

Brazil also produces ethanol in its northeastern region, where the sugarcane harvest runs from September to March but whose figures are not included in Unica's projections.

Hydrous ethanol prices in Brazil were assessed on Tuesday at Brazilian reais (R) 1,500/cbm (cubic metre) ($3.33/gal), up by R10/cbm from a week earlier.

Brazil uses hydrous ethanol as a stand-alone fuel in flexible-fuel vehicles (FFVs), competing directly with gasoline, while anhydrous ethanol is blended in gasoline at a mandated 20%.

Anhydrous ethanol prices were assessed steady this week at R1,430–1,450/cbm on thin market activity.

($1 = R1.70)

For more on ethanol visit ICIS chemical intelligence

By: William Lemos
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