High sales at pumps push up quotes in central-southern BR

Cepea, October 17 2019 – High ethanol sales at Brazilian pumps – since hydrous ethanol prices have been lower than that for gasoline – continue to underpin quotes for the biofuel in the domestic market.


Data from Cepea show that hydrous ethanol prices have been rising in the biggest producing states in Brazil since early in the 2019/20 season, except for Mato Grosso. In São Paulo, from April to September 2019, ethanol quotes rose 2.77% compared to that in the same period last year, in real terms (values were deflated by the IGP-M).


In the same comparison, prices increased 1.29% in Goiás (for deals within the state); 2.7% in Mato Grosso do Sul (for deliveries in São Paulo State and in southern Brazil); 1.91% in Minas Gerais and 2.59% in Paraná – in MG and PR, the averages account for deliveries within and out of the states.


In Mato Grosso (considering deals for delivery within the state only), the average ethanol price this crop is sharply lower than that in the previous season, by 8.56%. This scenario may be linked to the supply increase in the state, reflecting the operation of new and large-sized plants focused on ethanol production from corn.


MARKET IN OCTOBER – The amount of hydrous ethanol traded in São Paulo State (SP) in early October doubled compared to that from late September, reflecting the return of purchasers to the spot market – these agents started to buy large ethanol volumes, increasing liquidity in SP. This behavior was also observed in other ethanol-producing states, such as Goiás, Mato Grosso do Sul, Minas Gerais and Paraná.


Concerning sellers, although some refineries need to sell the biofuel stocked in order to make room in storage tanks, most of them did not lower asking prices. Besides, the good sales performance for hydrous ethanol at the pumps from central-southern BR also underpinned quotes, since the exchange ratio between ethanol and gasoline C continues favoring the biofuel.


Between October 7 and 11, the CEPEA/ESALQ Index for hydrous ethanol averaged 1.8004 BRL per liter (zero ICMS and PIS/Cofins), 3% up compared to that in the week between September 23 and 27. Concerning anhydrous ethanol, the CEPEA/ESALQ Index averaged 1.9652 BRL per liter (zero PIS/Cofins), 2.4% up in the same comparison.


On October 15, the ESALQ/BM&FBovespa Index for hydrous ethanol delivered in Paulínia (SP) closed at 1,872.50 BRL per cubic meter (zero taxes), a slight 0.2% up in the fortnight.


EXPORTS – In September, Brazil exported 225.4 million liters of anhydrous and hydrous ethanol, receiving for that 119.4 million USD (491.89 million BRL), according to Secex. In the 2019/20 season, Brazil has shipped more than 1.085 billion liters of ethanol, 23.62% up compared to that in the same period in the 18/19 crop (878.2 million liters). Ethanol imports, in turn, totaled 66.09 million liters in September, 21.58% down compared to that in August. Between April and September, Brazil imported 745.65 million liters of ethanol, 15 million liters less than that in the same period last season, according to Secex.





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