The loss of competitiveness of hydrous ethanol compared to gasoline has promoted a reduction in consumption and a drop in biofuel prices, whose prices are close to historically high levels after the 2021/22 crop failure, according to Unica (União da Indústria de Cana-de -sugar), in a fortnightly report on production this Wednesday (24).
For the entity that brings together the plants in the center-south, the drop in the price of hydrated ethanol has also promoted a reduction in the value of anhydrous ethanol (mixed with gasoline), which also contributes to a reduction in the value of fossil fuel.
“The market dynamics observed in the last fortnights was already expected. The loss of economic competitiveness of hydrous ethanol has promoted a reduction in the consumption of renewable energy and has already balanced the balance of supply and demand”, said the technical director of Unica, Antonio de Padua Rodrigues , in note.
“This condition, associated with the lower consumption of light fuels, has promoted successive drops in the value of hydrated products received by producers, which has been reduced in the last three weeks”, he commented.
At the end of last week, the price of ethanol at the mill (without taxes) was quoted at 3.6563 reais per liter (average in the State of São Paulo), according to Cepea, compared to a peak of 3.8918 reais/liter in the week closed on November 5th.
Anhydrous ethanol was counted at R$ 4.3723 per liter at the end of last week, compared to a peak of R$ 4.5353 per liter in early November.
Despite the reduction in recent weeks, ethanol values are close to historic peaks, after the harvest in the center-south was hit this season by drought and frost, which reduced the supply of products such as sugar and ethanol.
According to the executive, “the drop in the price of hydrated ethanol has also promoted a reduction in the value of anhydrous ethanol, as the sales contracts for the product link its price to those charged for hydrated ethanol”.
“This condition indicates that the additive can contribute to reducing the price of gasoline and, in terms of volume, we are able to meet the migration to gasoline consumption with anhydrous stocks in producers, with production to be carried out until March and with the import of biofuel that has been observed,” he added.
In the first half of November, with the harvest in the Center-South coming to an end, the production units in the Center-South sold a total of 988 million liters of ethanol, recording a 25.56% decrease compared to the same period of the harvest. 2020/2021.
In the domestic market, hydrated ethanol sales reached 538.85 million liters, maintaining the retraction trajectory that, in the last fortnight, was 32.09%.
The quantity of anhydrous ethanol sold increased by 2.77% compared to the same fortnight of the previous year, to 405.46 million liters.
Sugar production in the center-south retreated 49.70% in the first half of November, to 626,000 tonnes, according to Unica.
Sugarcane crushing in the period dropped 38.36%, to 12.55 million tons, while total ethanol production dropped 36.9%, to 741 million liters.
From the beginning of the 2021/2022 cycle until November 16, crushing accumulates a drop of 11.80%, to 516.97 million tons.
In the first half of November, 75 plants were in operation (65 processing sugarcane, 2 flex units and 8 corn ethanol plants), compared to 114 units in operation in the same period of the 2020/2021 harvest.
So far, 187 companies have already finished grinding in the 2021/2022 cycle, with 57 companies closing in the last fortnight.
Cumulatively from the beginning of the 2021/2022 harvest until November 16, sugar production reached 31.84 million tons, a decrease of 15.44% compared to the same period of the 2020/2021 cycle, while the accumulated production of ethanol reached 25 .84 billion liters, 10.39 billion liters of anhydrous ethanol (+14.79%) and 15.45 billion liters of hydrated ethanol (-19.84%).
Of the total manufactured, 2.10 billion liters of biofuel were produced from corn.
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