Brazil ethanol prices fall on growing supply

HOUSTON (ICIS)–More plants are grinding sugarcane in the state of Sao Paulo, Brazil, increasing ethanol supplies and pressuring prices lower, the Centre for Advanced Applied Economics (CEPEA) in Sao Paulo said on Tuesday.

Prices for Brazil hydrous ethanol for 21-24 March reached an average of Brazilian reais (R) 1.842/litre ($1.900/gal), a drop of 4.07% compared with the week before.

Similarly, anhydrous ethanol prices fell by 1.3% to R2.058/litre, CEPEA said.

No taxes are included in the figures.

Last week, the decline in hydrous ethanol prices was the biggest of the year, as it was also pressured by relatively soft demand from distributors. Buyers were said not be building inventories, but purchasing material on an as-needed basis. The extended Holy Week holiday did not lead to major purchases, according to researchers from CEPEA.

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

Brazil also produces ethanol in the northeast region of the country. The sugarcane harvest in that area runs from September to March.

($1 = R3.67)