Brazil Ethanol Price Falls With Harvest Imminent
Author: Roberto Samora
SAO PAULO - Ethanol biofuel prices at cane mills in Brazil's Sao Paulo state have been falling in the last few weeks after a steady ascent, with buyers mindful of a large harvest to begin next month and swell supplies.
The Center South, where about 90 percent of Brazil's cane is grown in the world's top ethanol exporter, is in between harvests and the next crop is anxiously awaited to allieve a global shortage that caused sugar and ethanol prices to soar.
Ethanol pumps now stand side by side with gasoline in Brazilian filling stations to power its millions of flex-fuel cars that can run on either fuel or any mix of both.
With supplies of the biofuel restricted by a rain-blighted harvest that ended late last year, the ethanol trade has been a seller's market but a dip of 10 percent in the last month shows the balance is shifting in the run up to the new crop.
"This is to do with the start of the harvest in March," said Miriam Bacchi, analyst at Cepea, a center of applied economics linked to the University of Sao Paulo.
Hydrous ethanol, which has a higher water content and is used in Brazilian flex-fuel cars, was quoted at the factory gate (before tax) at 1.07 reais ($0.59), down nearly 5 percent from 1.12 reais a week earlier.
Filling station prices remain largely unchanged however.
The price of anhydrous ethanol, the kind mixed into gasoline in Brazil and abroad, held firmer, shedding only 3 percent so far in the month of February.
The Center South's cane harvest doesn't usually get into full swing until April but it is likely to gather pace sooner this year with about 50 million tonnes of last year's cane still waiting to be cut. Heavy rain meant it was left in the fields.