Brazil's Ethanol Prices Mixed

NEW YORK (DTN) -- Brazil's ethanol prices have been mixed so far this month, with hydrous ethanol prices up 9.2% at $2.50 gallon while anhydrous ethanol eased 7.7% to $2.61 gallon during the past three weeks, according to data by Cepea, a research center linked to Brazil's Sao Paulo University.

Brazil produces both hydrous ethanol, which is used by domestic flex-fuel vehicles, and anhydrous ethanol, which must be blended with gasoline before being used to run regular vehicles. Less than 40% of the vehicles in Brazil's vehicle use gasoline. Brazil's anhydrous ethanol is often exported to the United States and elsewhere.

The price increase in hydrous ethanol was driven by rising demand, Cepea said, releasing its data a day after the country's Union of Sugarcane Industry Association estimated sugarcane production for the current 2014/2015 crop year at 580 million tons, down 2.9% year over year. UNICA said sustained drought in Brazil from late last year to early this year prompted the lower production estimates, which suggests ethanol supply may be reduced.

George Orwel can be reached at george.orwel@dtn.com

(BM/AG)

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