Cepea, September 16, 2024 – The demand for hydrous ethanol was low in early September, with only a few trades closed in the spot market of São Paulo state. According to data from Cepea, the volume of hydrous ethanol traded by mills in São Paulo from September 2-6 was the second lowest of the 2024/25 season.
The low demand reinforces that players have concerns about the current season and about oil price drops over the last weeks – consequently, decreases can be transferred to the Brazilian market. As for sellers, some units were away from closing deals, expecting values to increase again. Other mills were willing to trade since they have high stocks.
Between September 2 and 6, the CEPEA/ESALQ Index for hydrous ethanol closed at BRL 2.5081/liter (net of ICMS and PIS/Cofins), downing 1.88% compared to that in the previous week. Concerning anhydrous ethanol, the CEPEA/ESALQ Index closed at BRL 2.9358/liter, net of taxes (PIS/Cofins), for an increase of 0.65% in the same period.
In general, the 2024/25 crop is full of uncertainties, especially related to the volume of cane that will be processed and to the production of both sugar and ethanol, due to the impacts of the dry weather and of wildfires in late August.
Data from consulting companies released in early September indicate that a little less than 600 million tons of cane may be processed in the Central-South in Brazil, with a reduction compared to previous projections. As a result, the production of both sugar and ethanol is likely to decrease.
AUGUST – Prices for both hydrous and anhydrous ethanol finished August at low levels in São Paulo state. Considering the full weeks of August (considered as the peak period of the cane harvesting in the Central-Southern Brazil), the average of the CEPEA/ESALQ Index for hydrous ethanol closed at BRL 2.5827/liter, 0.78% down compared to July. As for anhydrous ethanol (sales in the spot market only), the average closed at BRL 2.9526/liter, dropping 1.2% in the same comparison.
(Cepea-Brazil)
