Brazil ethanol spot prices rise on tightening supply

04 December 2012 18:10  [Source: ICIS news]

HOUSTON (ICIS)--Brazil ethanol spot prices continued to rise in the last week of November as tighter supply outweighed a drop in demand, research group CEPEA said on Tuesday.

CEPEA assessed anhydrous ethanol prices at Brazilian reais (R) 1.3154/litre ($2.35/gal, €0.48/litre) in the week that ended on 30 November, up by 2.3% from R1.2861/litre a week earlier.

Hydrous ethanol was assessed at R1.1304/litre, up by 1.2% from the previous week.

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

Ethanol supply in Brazil is tightening because of the end of the sugarcane harvest in the centre-south, a region that accounts for 90% of the country's ethanol production, CEPEA said.

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

Centre-south mills are now focusing on meeting contracts as opposed to offering material in the spot market, the Brazilian group said.

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

($1 = R2.12)
($1 = €0.77)

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By: William Lemos
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