Cepea, October 17th, 2023 – Although the second week of October was shorter in Brazil – because of the national holiday on October 12th (Day of Our Lady of Aparecida) –, many ethanol deals were closed in the spot market of São Paulo State. Sales were high at the beginning of the week. Also, the collection of the product previously purchased at ethanol plants was high too.
Higher liquidity was linked to both the current high competitiveness of ethanol against gasoline at the pumps in São Paulo State and sellers’ (ethanol plants) firm stance on prices – agents were mostly focused on sugarcane crops, since recent rains have hampered the harvest and processing. Besides, the high price levels for demerara sugar in the international market have been underpinning ethanol values as this scenario encourages higher sugar production rather than ethanol production.
Still, the price for hydrous ethanol has been stable for at least a month. Between October 9-13, the CEPEA/ESALQ Index for hydrous ethanol closed at BRL 2.1753/liter (net of ICMS and PIS/Cofins), a slight 0.19% down from that in the last week of September (25-29). For anhydrous ethanol, the CEPEA/ESALQ Index closed at BRL 2.4366/liter, net of taxes (PIS/Cofins), 2% lower, in the same comparison. The ESALQ/BM&FBovespa daily Index for hydrous ethanol (Paulínia, SP) closed at BRL 2,301.50 per cubic meter on Oct. 13th, stable (+0.04%) compared to that on Sept. 29th.
According to Unica (Brazilian Sugarcane Industry Association), higher sugarcane supply in the current season has raised processing by 14.2%, so far (since April, when the season began), compared to that in the same period last season. The production of anhydrous and hydrous ethanol has increased 8.83%, also influenced by the production of ethanol from corn in central-western Brazil.
As for corn ethanol, nearly 3 billion liters have been produced in the current season, according to Unica, 44.2% more than that in the same period last year. For the coming years, perspectives are optimistic.