20 March 2012 17:33 [Source: ICIS news]
HOUSTON (ICIS)--Brazil ethanol spot prices posted new gains last week on limited supply and steady demand, research group CEPEA said on Tuesday.
CEPEA assessed anhydrous ethanol at Brazilian reais (R) 1.2924/litre ($2.70/gal, €0.54/litre), up by 1.0% from R1.2790/litre in the week that ended on 9 March.
Hydrous ethanol was assessed at R1.2077/litre, up by 0.6% from R1.2008/litre a week earlier.
Ethanol prices have risen as buyers continued to look for spot material, while supply was available at only a limited number of producers, the group said.
Brazil uses hydrous ethanol as a standalone fuel in flexible-fuel vehicles (FFVs), competing directly with gasoline, while anhydrous ethanol is blended in gasoline at a mandated 20%.
Despite gaining more than 10% since early February, hydrous ethanol prices could weaken in the coming weeks, a market participant said, citing growing competition from gasoline.
The biofuel is more competitive than gasoline in only two of Brazil's 26 states, another source said, quoting government data for last week.
CEPEA prices are ex-tank and do not include taxes.
($1 = R1.81)
($1 = €0.76)
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