Cepea, August 20 2019 – Firm demand is underpinning the average prices for hydrous and anhydrous ethanol in the 2019/20 season at higher levels than in previous crops.
In July, the CEPEA/ESALQ Index for hydrous ethanol averaged (in the full weeks) 1.6795 BRL per liter, 3.66% higher than that in the full weeks of June and 8% above that in July 2018, in real terms (values were deflated by the IGP-M from July/19). As for anhydrous ethanol, the CEPEA/ESALQ Index averaged 1.8634 BRL per liter (considering only the Brazilian spot market), 0.4% higher than in June/19 and 5% higher than in July/18.
In the 2019/20 season (April to July 2019), the average of the CEPEA/ESALQ Index for hydrous ethanol (considering the monthly averages) is 1.5% higher than that in the same period of 2018, in real terms. As for anhydrous ethanol, the average this crop is 0.27% higher than that between April and July 2018.
In light of the high demand, refineries have been unwilling to lower asking prices, despite the harvesting peak in central-southern Brazil. Besides, the slower crushing pace (compared to that in the same period last year) and lower ethanol inventories have been underpinning quotes too.
As for trades, the volume of hydrous ethanol marketed in July in São Paulo increased a staggering 72% compared to that in June, according to data from Cepea. Compared to that in the same period last year, trades increased 45%. This scenario shows that the demand continued firm in the last months.
MARKET IN AUGUST – The demand from some purchasers for ethanol was high in the first fortnight of August. Thus, quotes have been firm in Brazil for seven weeks. Purchasers were collecting the product previously purchased, while many refineries were unwilling to lower asking prices, due to the beginning of the crop peak.
Between August 12 and 16, the CEPEA/ESALQ Index for hydrous ethanol closed at 1.7452 BRL per liter (São Paulo, with zero ICMS and zero PIS/Cofins), 1.1% up compared to that in the week between July 29 and August 2. As for anhydrous ethanol, the CEPEA/ESALQ Index closed at 1.9462 BRL per liter (zero PIS/Cofins), 2.5% up in the same comparison.
The ESALQ/BM&FBovespa Index for hydrous ethanol delivered in Paulínia (SP) closed at 1,810.00 BRL per cubic meter (without taxes) on August 15, 1.6% up compared that on July 31.
Data from Unica (Brazilian Sugarcane Industry Association) released on August 9 showed that the amount of hydrous ethanol sold in the domestic market by the refineries from central-southern Brazil in July totaled 1.94 billion liters, almost 13% larger than that from June. Concerning anhydrous ethanol, sales in July totaled 775 million liters.
Still according to Unica, the amount of sugarcane crushed in the second half of July totaled 49.7 million tons, 4.25% up compared to the 47.7 million tons from the same period last year.
EXPORTS – Ethanol exports (hydrous and anhydrous) totaled more than 545.8 million tons in the 19/20 crop (April to June), 24.2% up compared to that in the same period last season (439.3 million liters), according to Secex. In July, Brazil shipped 206.7 million liters of ethanol, receiving a revenue of 103.7 million USD. That amount was 22% larger than that exported in June/19, and the revenue, 19.5% higher, in the same comparison.