Brazil's swap curve shows ethanol may have hit bottom for 2011

Chemical News: Brazil's swap curve shows ethanol may have hit bottom for 2011

https://www.chemnet.com Jul 12,2011 Platts
Ethanol prices in Brazil may have already reached a bottom for the 2011-12 marketing year, data from Brazilian derivatives clearing house BM&F Bovespa shows.

BM&F's cash settled ethanol swaps point to a rise in ethanol prices to Real 1,277.50/cubic meter ($786.85/cu m) in March 2012 from Real 1.172/cu m in July 2011.

The prices refer to duty-unpaid hydrous ethanol delivered at mills in the city of Paulinia, in the state of Sao Paulo.

Brazil's swap curve for hydrous ethanol follows the development of the sugarcane harvest in the center-south region of the country, which runs from April to December.

Cane harvesting reaches full swing in July, when prices typically hit a bottom for the season.

A poorer-than-expected 2011-12 sugarcane harvest and heated demand for the biofuel held ethanol swaps about 40% higher than in 2010, when July paper was pricing at Real 821.50/cu m.

Ethanol values at the pump have also started to edge up after reaching lows so far for 2011 in June.

In the week from July 3-7, hydrous ethanol averaged Real 1.99/liter ($4.82/gallon) at more than 8,000 filling stations polled by the national petroleum agency ANP, up over 4% from a month earlier.

On the average of June, ethanol prices at the pump jumped 25% year-on-year to Real 1.937/l from Real 1.537/l.

Print | add to Favorites | Close