Ethanol Price Gain Trimmed in Brazil
NEW YORK (DTN) -- A downward reversal in Brazil's ethanol prices last week trimmed gains for the month of March, according to a report by Cepea, a research center linked to Brazil's Sao Paulo University.
The report stated the downward reversal that came after 11 consecutive weeks of gains was prompted by excess available supply and dwindling buying interest.
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Cepea said many buyers were priced out of the market after a strong rally in early March, forcing many traders to step to the sideline. Secondly, millers are trying to clean up storage to make room for the new crop after the April 1 start of the new sugarcane season, so they are lowering selling prices to move out inventory, said the report.
As a consequence, anhydrous ethanol was sold last week at an average price of $2.61 gallon, down 1.2% versus the prior week while up 5.9% compared with the average a month earlier.
The report said hydrous traded at an average price of $2.38 gallon last month, down 2.53% versus the prior week while posting a month-over-month gain of 3.7%.
Brazil produces both hydrous ethanol, which is used domestically in flex fuel vehicles, and anhydrous ethanol, which must be blended with gasoline before being used to power regular automobiles.
Brazil's anhydrous ethanol is often exported to the United States and elsewhere.
George Orwel can be reached at george.orwel@telventdtn.com
(BM/CZ)
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