Sales needs and weak demand press down quotes for hydrous ethanol in BR

Cepea, August 18, 2020 – The sales needs of some refineries added to the low demand for hydrous ethanol in the Brazilian market pressed down quotes for this biofuel in the first fortnight of August. Between August 10 and 14, the CEPEA/ESALQ Index for hydrous ethanol closed at 1.6613 BRL per liter (zero ICMS and zero PIS/Cofins), 1.8% down compared to that in week between July 27 and 31.


Quotes were mainly pressed down by the fact that some plants were selling the product to make room in storage tanks, while the interest of purchasers was low. On August 13 and 14, however, prices stabilized, underpinned by Petrobras announcement of a 4% increase in gasoline prices.


Differently from hydrous ethanol, the CEPEA/ESALQ Index for anhydrous ethanol increased slightly in the fortnight (+0.3%), averaging 1.9104 BRL per liter (zero PIS/Cofins) between August 10 and 14.


According to Cepea surveys, the volume of hydrous ethanol marketed in São Paulo State between August 10 and 14 decreased by 40% compared to that in the previous week and by 40.2% compared to that in the same period last year. From April (official beginning of sugarcane crushing in SP) to the second week of August, the amount of hydrous ethanol traded was 46% lower than that in the same period last year.


This is linked to the weak demand since the beginning of the 2020/21 year-crop, due to the lower vehicle circulation during the covid-19 pandemic in Brazil. Besides, some refineries are focused on sugar production, whose exports have been high.


As for the daily Index, the ESALQ/BM&FBovespa Index for the hydrous ethanol delivered to Paulínia (SP) between August 10 and 14, it averaged 1,736.50 BRL/cubic meter (zero taxes), 1.4% down compared to that in the week between July 27 and 31.




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