Average real prices for ethanol drops by 13% in the 20/21 season

Cepea, April 16, 2021 – Despite the consecutive valuations in the last months, the average prices for hydrous and anhydrous ethanol in the 2020/21 season were lower than that in the previous season, in real terms.

 

Cepea surveys show that the averages in the 20/21 season decreased because of the low prices in the first two months of the crop (April and May 2020). It is worth to mention that, in that period, some ethanol plants needed to sell the biofuel, while the demand for ethanol was low because of the restrictive measures to fight the first wave of the covid-19 pandemic.

 

From April/20 to March/21, the CEPEA/ESALQ Index for hydrous ethanol (prices paid to ethanol plants) averaged 2.1574 BRL/liter (zero ICMS and zero PIS/Cofins), 13% down, in real terms, compared to that in the same period of the 2019/20 season (April/19 to March/20) – the monthly averages were deflated by the IGP-M from March/21. For anhydrous ethanol, the CEPEA/ESALQ Index averaged 2.3729 BRL/liter in the 2020/21 season, 12.8% lower than that in the previous crop.

 

In early April, however, prices increased in São Paulo state. Purchasers were willing to trade in the spot market, which sustained values. Moreover, the supply is low in this early 2021/22 season in the Central-South – some mills have postponed the beginning of crushing activities due to unfavorable weather conditions for the harvesting in some areas in São Paulo.

 

On the average of the 2020/21 crop, the volume of hydrous ethanol sold by the ethanol plants in São Paulo State (SP) decreased by 20.5% compared to that in the same period of the previous season (April/19 to March/20). The highest amount (14.9% of the total marketed in the year-crop) was sold in October 2020, followed by September (9%), when ethanol prices were attractive sellers (compared to gasoline quotes).

 

Considering the prices of the products from the sugar-energy sector, selling sugar was more advantageous than selling ethanol along the season. Between April/20 and March/21, sugar prices were 45.4% higher than that for hydrous ethanol and 32.8% higher than that for anhydrous ethanol. As regards ethanol, anhydrous quotes were 9.3% higher than hydrous prices, in the same comparison. These comparisons considered net prices for taxes and the Total Recoverable Sugar (TRS) value of the sugarcane used to produce these by-products.

 

(Cepea-Brazil)

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