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Ethanol Production and Prices Wane in Brazil Due to Sluggish Demand
Ethanol Production and Prices Wane in Brazil Due to Sluggish Demand

Ethanol Production and Prices Wane in Brazil Due to Sluggish Demand

  • 06-Sep-2022 7:00 PM
  • Journalist: Bob Duffler

The Brazilian Sugarcane Industry Association, UNICA, has published a report showcasing a drop in the demand for Ethanol in the Brazilian market. The operational rate of Ethanol production has slipped in the Brazilian market due to diminished feedstock (sugarcane) availability with major Ethanol manufacturers. In the previous month, end users expressed low interest in buying the product; on the other hand; the suppliers upheld the original sugar prices in the domestic market. The price dynamics of Ethanol are likely to continue to follow the declining pace in the Brazilian market owing to sluggish demand and low output. In the Brazilian market, the prices of Ethanol assembled at USD 765 per MT, FOB Santos, with a decline of 6% towards the end of the first week of September.

Variations in weather conditions, such as heavy rainfall in north-eastern Brazil, have led to floods and overflowing of rivers in the region, proportionally impacting the yield quality and quantity of feedstock sugarcane in the domestic market. However, in the Southern part, drought conditions hindered the production of feedstock sugarcane, directly impacting the prices of Ethanol in the Brazilian market. As of the current harvesting situation, factories in the southern region have produced 15.67 billion liters of Ethanol which declined approximately by 5% compared with the previous season. Ethanol producers sold 1.2 billion liters of the product during the second half of August in the regional market. A decline of 3 percent was observed in the production of Ethanol when compared with a similar time a year ago. Domestic deals included 645.38 million liters of hydrous Ethanol with a decrement of 6.32 percent, and 493.29 million liters of anhydrous Ethanol, up 15.69 percent.

As per ChemAnalyst, the prices of Ethanol from September onwards are likely to remain persistent because of the low demand from pharmaceutical and food services. According to the market experts, the need for Ethanol-based fuel in the domestic market and the increase in the operational rate will stabilize the Ethanol market prices in the upcoming days.

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