Ethanol - Latin America (Week Report)
Latin America – Improved weather and weak hydrous demand continue to impact on Brazil’s domestic ethanol prices. Recent warm, dry weather has given those millers who decided to continue through the inter-harvest period some breathing space and also improved the prospects for an early start to the 2010/11 crush. Hydrous prices remain uncompetitive in the most states, supporting increased gasoline C use at the expense of hydrous. Petrobras has indicated that Brazilian gasoline demand increased 15-20% so far in 2010, compared to the previous year. Hydrous offers this week have dropped to R$1,290/cu m ex-mill Ribeirao Preto (with taxes) but trades have occurred as low as R$1,250/cu m, down R$50/cu m from last week. Offers of anhydrous have dropped to R$1,300/cu m, down R$30/cu m. Export offers have fallen as a result of lower domestic prices and despite a firmer Real. Export hydrous prices are now seen in a notional bid/offer spread of $515-635/cu m FOB Santos, down $15/cu m on both ends of the range. Indicative values for Anhydrous ANP fell $10/cu m to $540-750/cu m while prices for EU Grade Anhydrous are down by a similar margin, now pegged in a $680-780/cu m FOB Santos band
