Brazil ethanol prices rising despite harvest/crush

HOUSTON (ICIS)–Brazil ethanol in the Sao Paulo market kept an upward trend on prices through the end of July, mainly because of limited supply, the Centre for Advanced Applied Economics (CEPEA) said on Tuesday.

According to researchers from CEPEA, most processing plants have put priority on producing cane sugar for human consumption even as harvest/crush in the centre-south continues with favourable dry weather conditions.

In addition, demand from ethanol distributors increased last week, putting pressure on fuel prices, CEPEA says.

CEPEA assessed hydrous ethanol prices for the week of 25-29 July at Brazilian reais (R) 1.558/litre ($1.80/gal), a 1.3% increase from the previous assessment.

Despite lower trade volumes, anhydrous ethanol averaged R1.695/litre ($1.96/gal), a 4.5% increase from the previous assessment, according to CEPEA researchers.

Most sales of anhydrous ethanol continue to be under contract, not spot. Taxes are not included in the figures, CEPEA said.

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. The sugarcane harvest in that area runs from September to March.

($1 = R3.26)