Center-South Brazil hydrous ethanol sales jump 17% in H1 March

Domestic hydrous ethanol sales by mills in Center-South Brazil totaled 632.03 million liters during the first half of March, 17.33% higher than the second half of February, data from Brazilian sugarcane industry group UNICA showed March 28.

Although hydrous sales showed a fortnightly increase, sales year-on-year recorded a 19.14% drop over the same period in 2021.

The quantity of anhydrous ethanol sold to the domestic market during H1 March totaled 434.72 million liters, 10.73% higher than the 392.60 million liters recorded in H2 Feb., and 11.39% higher than the same period in 2021.

The increase in H1 March sales of hydrous ethanol can be explained by the favorable hydrous ethanol price ratio to gasoline when compared to H2 Feb., according to multiple market sources.

The hydrous ethanol price ratio to gasoline during H1 March averaged 68.54%, below the 69.35% recorded in H2 Feb, and both below the 70% threshold that discourages demand from consumers for hydrous ethanol, or E100, because of its lower energy content.

The Southeast hydrous ethanol price ratio to gasoline remained relatively unchanged at 67.54% in the week ended March 26 from the 67.26% ratio observed the week prior, National Petroleum and Biofuel Agency data showed.

The absolute price differential between gasoline and hydrous ethanol at the majority of gas stations in Brazil's Center-South was Real 2.328/l March 26, above the Real 1/l mark that typically encourages demand from consumers.

A price differential of Real 2.328/l between gasoline and E100 could encourage consumers to favor less-expensive hydrous ethanol when considering savings of around Real 116 while refilling an average-sized tank.

Consumers with flex-fuel vehicles can opt for E100 or gasoline, which has a blend of 27.5% anhydrous ethanol. Consumers generally fill up with E100 only when its price is 70% or less than the gasoline price, because of hydrous' lower energy content, or if the absolute gasoline-to-E100 price premium increases well above the Real 1/l mark.