Demand for ethanol increases and boosts prices in the Brazilian market

Cepea, May 20, 2020 – The demand for ethanol increased again in the Brazilian market in early May, pushing up prices for both hydrous and anhydrous ethanol in São Paulo State. Cepea surveys pointed to a 13.5% increase in the amount of hydrous ethanol traded in the first week of the month, compared to that in the last week of April.

 

Between May 11 and 15, the CEPEA/ESALQ Index for hydrous ethanol closed at 1.3931 BRL per liter, 5% up compared to that in the last week of April. The CEPEA/ESALQ Index for anhydrous ethanol closed at 1.5424 BRL per liter (zero PIS/Cofins), 1.28% up in the same comparison.

 

Distributors increased purchases, aiming to replenish inventories – despite the advance of covid-19 in Brazil, the social isolation rate in São Paulo State decreased to 47.2%, according to data released by the state government on May 10, meaning that people had been consuming more fuel in the first fortnight of May.

 

As regards refineries, agents from many of them were present in the market and unwilling to lower asking prices. The number of deals for anhydrous ethanol almost tripled compared to that in the last week of April, according to Cepea surveys. A large amount of the total marketed was allocated to other states, primarily in northeastern Brazil.

 

In this context, the increase of gasoline prices by Petrobras on May 6 brought some relief to agents from the ethanol market – quotes rose by 12% at refineries. Still, price levels are lower than in the international market.

 

As for the daily Index, the ESALQ/BM&FBovespa Index for the hydrous ethanol delivered to Paulínia (SP) averaged 1,455.05 BRL/cubic meter (zero taxes) in the first fortnight of May, 0.86% up compared to that in the first half of April. The flow of ethanol from Goiás and Mato Grosso States into São Paulo was high.

 

(Cepea-Brazil)

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