Brazilian hydrous ethanol widens, rains slow supply

Author: Leela Landress


HOUSTON (ICIS) -- Brazil’s hydrous ethanol prices widened, rising on the upper end of the range, as rainy weather during the week limited production and helped support prices.

Domestic hydrous ethanol spot prices were at Brazilian real (R)2,000-2,100/ cubic metre (cbm; $1.98-2.08/gal)  ex-works Sao Paulo, higher on the upper end of the range by R50/cbm from last week.

The country uses hydrous ethanol as a stand-alone fuel in flexible-fuel vehicles (FFVs), competing directly with gasoline.

Many Brazilian drivers own flex-fuel cars, which allow switching from gasoline to ethanol. Drivers substitute for ethanol only if its price is less than 70% that of gasoline.

Ethanol is an alcohol made by fermenting sugar components of plant materials such as corn and wheat starch, sugarcane, sugar beet, sorghum and cassava.  Sugarcane is virtually the sole source of feedstock for ethanol production in Brazil.