European Ethanol Prices Upswing Escorted by Feedstock Shortage
European Ethanol Prices Upswing Escorted by Feedstock Shortage

European Ethanol Prices Upswing Escorted by Feedstock Shortage

  • 28-Sep-2022 5:35 PM
  • Journalist: Francis Stokes

France- The Ethanol market in the European region has kept following the northward momentum on the back of rising feedstock corn and sugarcane prices. France is the major producer of corn in the European region and is currently facing a toll in the production of the feedstock of Ethanol. Heat waves and dryness clutched much of the country, threatening the end-use manufacturers to produce Ethanol. Feedstock shortage in the regional market raised its prices due to firm demand. Consequently, the final prices of Ethanol ranged between USD 1070 to 1140 per MT, CFR Hamburg.

According to the Ministry of Agriculture, France, the demand for the same inclusive domestic and international market increased with the onset of corn harvest in the country. Further, the ministry added that nearly a fall of around 24% may occur in animal feed required to fulfill the demand with the season changes. Counting on the facts, the Vegetable Health Index (VHI) mentioned that France continued to witness dry summers and drought conditions impacting the corn yield in the domestic market. With the decline in feedstock production and continuous rising demand for Ethanol from biofuel production in the regional market, the final price dynamics of Ethanol in the European market eventually rose.

To keep up the production flow of Ethanol and its derivatives in the regional market, the EU is importing corn from other countries such as Ukraine to help offset the shortfall. Drought also hit corn yield in Germany and Romania, two key EU producers. Apart from these internal factors, energy costs and rising fertilizer prices are impacting the production cost of Ethanol in the regional market. As Russia terminated the outflow of natural gas in the European region, industrial and commercial sectors have been affected drastically, as the same energy is used to dry the feedstock, corn, after harvesting.

As per ChemAnalyst, an alarming bell for European Ethanol producers, suppliers, and buyers can be heard amidst the rising gap between demand-supply in the domestic market. With the arrival of the winter season, the demand for feedstock will rise significantly, raising the prices of Ethanol in the European market.

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