For one month and a half, the hydrated ethanol has been remunerating more than the anhydrous. According to Cepea, the advantage was of 2 percent comparing the two types of ethanol, in the Sao Paulo state, last week. For the anhydrous return to remunerate as much as the hydrated, its prices should be at 0.85876 reals per liter (excluding taxes).
In 2006, the hydrated also kept more advantageous against the anhydrous in some months of off-season, with figures oscillating between 1 and 4 percent. The hydrated advantage is related to the higher demand in comparison to the anhydrous due to the flex-fuel vehicles sells.
Regarding the market, prices have been decreasing, due to the supply higher than the demand even with the off-season period. Last week, the CEPEA/ESALQ Index (Sao Paulo state) for anhydrous dropped 2.21 percent, averaging 0.39876 dollars per liter (excluding taxes). The hydrated, also in SP state, decreased 2.48 percent, to 0.38341 dollars per liter (excluding taxes). These prices refer to trades delivered in the mills.
In January, the Index for anhydrous increased 3.07 percent over December, to 0.4070 dollars per liter. The hydrated upped even more, 9.26 percent, at 0.3952 dollar per liter.
The news that the United States should increase its demand by ethanol reinforces the fundaments of good outlook for the Brazilian sugar and ethanol sectors.