Cepea, March 17, 2021 – March, which is the last month of the 2020/21 sugarcane season in central-southern Brazil, began with new increases in the prices of ethanol in São Paulo State (SP). Price rises were linked to both the decrease in fuel inventories at ethanol plants, which is common in the offseason, and the valuations of gasoline at CME Group (Reformulated RBOB gasoline) and WTI oil, reference in the United States.
In the second week of the month, however, after rising for 11 weeks, prices for hydrous ethanol (paid to ethanol plants) stabilized, due to the nearness of crushing the sugarcane from the new season (2021/22) in central-southern Brazil. In general, the volume of ethanol to be made available in the coming weeks should not be high, but the beginning of crushing signals an increase in supply and consequently pressure on quotes.
Between March 8 and 12, the CEPEA/ESALQ Index for hydrous ethanol (prices paid to ethanol plants) averaged 2.9059 BRL/liter (zero ICMS and zero PIS/Cofins), 7.2% up from that in the week between February 22 and 26. For anhydrous ethanol, the CEPEA/ESALQ Index increased by 6.6%, averaging 3.1229 BRL/liter (zero PIS/Cofins).
According to data from Unica, in the first fortnight of March, 17 ethanol plants were beginning to crush sugarcane in central-southern Brazil. Until the end of March, 21 new plants should start activities. It is worth to mention that crushing continued in some plants during the offseason, primarily where corn is used as the raw material for ethanol production.
Another reason for the interruption of the upward trend of prices was the lower number of agents from distributors in the spot market, which may be a reflect of the deals closed in previous weeks and the uncertainties about the effects of the social distancing measures on ethanol consumption.
Between February 26 and March 15, the ESALQ/BM&FBovespa daily Index for the hydrous ethanol delivered to Paulínia (SP) rose by 2.37%, closing at 2,953.00 BRL/cubic meter (zero taxes) on March 15.