Cepea, April 1st, 2021 – The 2020/21 season is ending, and ethanol prices (hydrous and anhydrous) have dropped by almost 16% in the spot market of São Paulo State (SP). This devaluation, observed in the last full week of March (22 – 26), was the steepest in the 2020/21 season and reflected the sharp decrease in the demand for the biofuel.
Cepea surveys show that only a few deals were closed in late March, when small amounts were sold, since distributors were working with the product previously purchased. As for sellers, only some agents from a few ethanol plants were interested in closing deals in the spot of SP, selling inventories in order to make room for the ethanol from the 2021/22 season, which officially began on April 1st, 2021.
Between March 22 and 26, the CEPEA/ESALQ Index for hydrous ethanol (prices paid to ethanol plants) averaged 2.3071 BRL/liter (zero ICMS and zero PIS/Cofins), a steep 15.8% down compared to that in the previous week and 14.8% lower than that in the last week of February (22 – 26). For anhydrous ethanol, the CEPEA/ESALQ Index dropped by 15.9% in the weekly comparison and by 14.3% in the monthly comparison, averaging 2.5096 BRL/liter (zero PIS/Cofins) in the last week of March.
Between February 26 and March 31, the ESALQ/BM&FBovespa daily Index for the hydrous ethanol delivered to Paulínia (SP) dropped by 17%, to 2,393.00 BRL/cubic meter (zero taxes) on March 31. The intense flow of ethanol from other states in central-southern Brazil to SP influenced devaluations in Paulínia.
As regards the 2021/22 season, estimates from Itaú BBA indicate that the sugar-energy sector should allocate 46% of all the sugarcane harvested to sugar production and 54%, to ethanol production, similar to that in the current season.