Ethanol - Latin America (Week Report)
Latin America – Ex-mill prices in Brazil continue to fall on weak demand, but the retail market appears to be lagging behind with values there little changed over the week. Hydrous traded yesterday at R$1,050/cu m ex-mill Ribeirao Preto, down as much at R$150/cu m on the previous week. Anhydrous prices suffered a similar fate with values falling R$140/cu m to R$1,080/cu m (same basis). However, the drop in producer prices has yet to flow through to retail markets (1st graph) and ethanol still remains uncompetitive in all but two states so the drop in prices has not yet stimulated a recovery in domestic demand. Unica has recently attempted draw attention to the issue and has called on the government to provide incentives for producer stockpiling to ensure supplies in the inter-harvest period. Indicative export values dropped sharply again this week, with the fall in domestic values accentuated by a stronger Real. Hydrous ANP offers fell $50/cu m to $550/cu m FOB Santos but bids were steady at $480/cu m. Indicative anhydrous ANP offers dropped $70/cu m to $650/cu m but still remain distant from bids which fell another $10/cu m to $500/cu m. EU grade Anhydrous is indicated in a $600-700/cu m FOB Santos bid/offer range with bids and offers both down $50/cu m.
