Brazil ethanol prices soften on continued supply pressure

17 July 2012 22:25  [Source: ICIS news]

HOUSTON (ICIS)--Brazil's ethanol spot prices remained on a downtrend in the second week of July as a result of continued supply pressure, research group CEPEA said on Tuesday.

CEPEA assessed hydrous ethanol at Brazilian reais (R) 1.0561/litre ($1.97/gal, €0.42/litre) in the week that ended on 13 July, down by 0.6% from R1.0623/litre a week earlier.

Anhydrous ethanol prices were assessed at R1.2982/litre last week, down by 1.2% from R1.3143/litre in the week that ended on 6 July, according to figures from the Brazilian group.

Brazil blends anhydrous ethanol in gasoline at a mandated 20%, while hydrous ethanol is used as a standalone fuel in flexible-fuel vehicles (FFVs), competing directly with gasoline.

CEPEA said ethanol prices in Brazil are dropping because the sugarcane harvest in the country's key centre-south region is at its peak.

The harvest runs from April to November/December.

However, the group added that the reduction in spot prices this year is not as pronounced as in previous years because of a greater balance between a smaller sugarcane harvest and weaker demand for the biofuel.

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

($1 = R2.03)
($1 = 0.81)

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By: William Lemos
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