24 January 2012 15:27 [Source: ICIS news]
HOUSTON (ICIS)--Brazilian ethanol prices fell sharply in the third week of January, pressured by softer demand and inventory reduction, research group CEPEA said on Tuesday.
CEPEA assessed hydrous ethanol last week at Brazilian reais (R) 1.1601/litre ($2.51/gal, €0.51/litre), down by 5.2% from R1.2240/litre in the week that ended on 13 January.
Anhydrous ethanol prices were assessed at R1.2558/litre, down by 5.9% from R1.3350/litre a week earlier.
Ethanol spot prices had not posted such sharp losses since mid-May 2011, when hydrous ethanol slumped by 9.1% and anhydrous fell by 5.3%, the research group said.
The reduction last week pushed buyers to the sidelines, putting additional pressure on the market, CEPEA said, also citing competition from gasoline as a factor eroding support for hydrous ethanol.
Hydrous ethanol is used in Brazil as a standalone fuel in flexible-fuel vehicles (FFVs), competing directly with gasoline, while anhydrous ethanol is blended in gasoline at a mandated 20%.
($1 = €0.77)
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