End of crop and firm demand push up prices in BR

Cepea, November 4, 2019 – Ethanol prices increased in the spot market of São Paulo State in October, despite the higher production. The boost came from the firm demand from retailers, since the exchange price ratio at pumps continues favorable to ethanol. According to ANP (National Agency of Petroleum, Natural Gas and Biofuels), the exchange price ratio between these two fuels in the 2019/20 season (April until mid-October) is around 64.5%.


As regards distributors, the purchasing interest was higher, which fastened the trading pace. Refineries, in turn, were not willing to lower asking prices. Although the number of plants ending crushing was still low, others should finish activities in November.


Between October 28 and November 1, the CEPEA/ESALQ Index for hydrous ethanol closed at 1.8571 BRL per liter (zero ICMS and PIS/Cofins), 5% up compared to that in the week between September 30 and October 4. Concerning anhydrous ethanol, the CEPEA/ESALQ Index closed at 2.0393 BRL per liter (zero PIS/Cofins), 5.1% up in the same comparison. On October 31, the ESALQ/BM&FBovespa Index for hydrous ethanol delivered in Paulínia (SP) closed at 1,938.00 BRL per cubic meter (zero taxes), 6.7% up compared to that on September 30.


Concerning ethanol production, data from Unica (Brazilian Sugarcane Industry Association) indicate that, between April 1 and October 16, 27.52 billion liters of ethanol were produced in central-southern Brazil (19.2 billion liters of hydrous ethanol and 8.31 billion liters of anhydrous ethanol), 5.93% up compared to that in the same period of 2018.


Despite the high consumption, anticipation of the crushing end at a higher number of plants in central-southern Brazil (until October 16) compared to the 20 plants last season (data from Unica) may also be considered an underpinning factor to quotes. Weather conditions have been favoring sugarcane crushing this season, with only a few interruptions registered.





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