High demand underpins prices for hydrous ethanol in the Brazilian market

Cepea, February 19, 2021 – Hydrous ethanol prices have been on the rise in the market of São Paulo State (SP) since late December 2020. The boost comes from the gradual increase in the demand for the biofuel. Between February 8 and 12, the CEPEA/ESALQ Index for hydrous ethanol (paid to ethanol plants) closed at 2.2474 BRL/liter (zero ICMS and zero PIS/Cofins), 5.6% up compared to that in the last week of January (25 – 29). For anhydrous ethanol, the CEPEA/ESALQ Index closed at 2.4993 BRL/liter (zero PIS/Cofins), 2.6% up in the same comparison.

 

Agents from distributors continued to purchase high volumes of ethanol, aiming to supply the market of SP. As the beginning of sugarcane crushing is expected to delay, some purchasers are anticipating acquisitions, in an attempt to avoid paying higher prices until the new product arrives at the market.

 

According to data from Unica (Brazilian Sugarcane Industry Association), the volume of anhydrous and hydrous ethanol sold by the ethanol plants in central-southern Brazil in the Brazilian market in the second fortnight of January totaled 1.25 billion liters, 1.65% higher than that in the same period of the previous season. This is the first time in the 2020/21 season that the volume traded in the domestic market is higher than that from the same period of 2019/20.

 

Between January 29 and February 12, the ESALQ/BM&FBovespa daily Index for the hydrous ethanol delivered to Paulínia (SP) rose by 10.24%, closing at 2,428.50 BRL/cubic meter (zero taxes) on February 12.

 

(Cepea-Brazil)

 

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