Haxo Bioenergy

Renewable, Sustainable, Low Carbon Biofuels and Clean Energy Company

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Ethanol - Latin America ( Week Report )

LATIN America – Increasing demand ahead of the holidays in Brazil helped reverse the recent price downturn and further rain over the long weekend added to the upward momentum. Domestic hydrous prices gained about R$80-100/cu m and are currently sitting around R$1,000/cu m ex-mill Ribeirao Preto (with taxes). Gains of up to R$150/cu m in anhydrous offers over the past week have taken them to R$1,050/cu m (same basis). There are reports of long lines of trucks to load ethanol at mills after strong pre-holiday demand and a return to competitiveness in major regions boosted demand for ethanol (1st graph). However, heavy rainfall in major growing regions has interrupted ethanol production and reduced already-tight availability. These higher domestic values have fed into indicative values for exports, although there is little prospect of substantial physical trading due to a further widening of the arbitrage. Notional bids for hydrous have been raised by $40/cu m to $480/cu m FOB Santos but offers are $90/cu m higher at $550/cu m. Anhydrous ANP bids are quoted in a notional bid/offer spread of $500-635/cu m FOB Santos with the margin widening from $70/cu m last week to $135/cu m this week. Similarly, bids for EU Grade Anhydrous rose $30/cu m to $530/cu m but offers jumped $70/cu m to $650/cu m.

Posted April 7, 2010