Some Brazilian motorists who fuel their cars only on sugarcane-based ethanol are switching back to gasoline in response to high sugar prices that have now made the biofuel more costly in some states, according to Reuters.

Ethanol usually is cheaper than gasoline so drivers stuck with it when flexible-fuel cars arrived in Brazil in 2003.

Prices for ethanol have increased by as much as 50 percent in some areas in just a few months.

Paulo Mizutani, head of the sugar and ethanol division at Cosan, Brazil's top producer of the products, said it could be like this until March when a new sugarcane harvest begins.

The National Petroleum Agency said ethanol in the southern states of Minas Gerais and Santa Catarina were at or above the threshold of 70 percent of gasoline prices -- a point where it becomes more costly than gasoline.

In Sao Paulo, it was around 60 percent and about 67 percent in neighboring Rio de Janeiro. A liter of ethanol in Sao Paulo city costs about $3.26 per gallon.

(Reuters, Oct. 21, 2009)
(http://www.reuters.com/…)

DTN: The Brazilian government is considering scaling back its ethanol blend from E25 to E20. Adhemar Altieri, director of corporate communications for Brazilian ethanol producer UNICA, said latest numbers show that the percentage of overall light vehicle sales in Brazil that are flexible fuel has increased by 92 percent in October. "Most people buy flex cars because they want to run them on ethanol, and even with higher prices at the pumps in recent weeks, ethanol is still a good buy in most of the country," Altieri told DTN in an email. Every time ethanol use goes up, he said, the need for anhydrous ethanol drops because ethanol use is constantly growing compared to gasoline use. Joel Velasco, chief representative for North America UNICA, said the E20/E25 market is small in Brazil and continues to shrink as more FFVs are purchased. (Todd Neeley)