Lower supply and higher demand push up prices in BR

Cepea, August 16, 2021 – The lower availability of ethanol and the increase in the demand for the biofuel in the spot market of São Paulo State (SP) resulted in higher ethanol prices in the first fortnight of August. Thus, the prices have been higher than that in the same period of previous seasons, in nominal terms.


Between August 9 and 13, the CEPEA/ESALQ Index for hydrous ethanol closed at 3.1382 BRL/liter, 5.7% up from that in the last week of July (26 – 30). In the same comparison, the CEPEA/ESALQ Index for anhydrous ethanol averaged 3.5733 BRL/liter between August 9 and 13, 4.2% up in the same comparison.


As regards ethanol plants, uncertainties about the possible damages caused by the recent unfavorable weather to sugarcane crops (and to the volume to be processed in the coming months) are making agents worried. It is worth to mention that crushing of the sugarcane from the 2020/21 season is supposed to end earlier, by a month or more, in some of the plants in central-southern Brazil. In this scenario, sellers have been unwilling to lower asking prices for ethanol.


As for purchasers, the demand for ethanol increased in early August, following the trend observed in late July. This is due to the replenishing of inventories by distributors, which expect consumption to increase because of the return of classes.


Between August 9 and 13, the ESALQ/BM&FBovespa daily Index for the hydrous ethanol delivered to Paulínia (SP) averaged 3,206.60 BRL/cubic meter, 6.07% up from that in the last week of July and the highest of the year, in nominal terms.





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