Ethanol: price recovery, but stocks still high

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The price of hydrous recovered in the last weeks of January, and may be associated with the increase in demand for biofuel. However, high inventories may continue to put pressure on prices.

In Paulínia, the price of hydrous reached R$ 2.23/l at the end of January (26/01), without taxes, representing an increase of 11.7% compared to 30 days ago (26/12). The price increase may be linked to the increase in demand for biofuel, and to advertising actions aimed at presenting the benefits of using ethanol for the population, carried out by UNICA.

On the supply side, according to data from UNICA, total ethanol production reached 0.3 million m³ in the first fortnight of January, an increase of 39.9% compared to the same fortnight of the previous harvest. In the accumulated harvest, total ethanol production reached 31.8 million m³, an increase of 14.8% compared to the same period in 2022/23. Of this total, 12.8 million m³ were anhydrous and 19 million m³ hydrated, representing an increase of 8.5% and 19.4%, respectively, in the same comparison.

In relation to the demand for hydrous, output from plants to the domestic market, according to data from UNICA, grew in January by 39.1%, reaching 1.8 million m³, compared to January 2023, and in the first 15 days of the year there were 796 thousand m³, an increase of 83.8% compared to the first half of Jan/23. In total, exports to the domestic market were 11.9% higher in the same comparison.

With the growth in the supply of ethanol, given the increase in the volume of sugarcane crushing, the demand for biofuel, even though it is growing, is still lower than production. This fact results in higher hydrated stocks and puts pressure on the price with the additional expectation of an early harvest start in mid-March. Parities between hydrated and C gasoline remain favorable to biofuel in the main ethanol consuming states. In the case of São Paulo, in the week of January 21st to 27th the parity is 58.8%.Sign up and receive our newsletter

The article is in Portuguese

Tags: Ethanol price recovery stocks high

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