Porto Alegre, June 17h 2024 – The most recent data on average prices for hydrated ethanol in the physical market showed a sign of a strong level of deceleration in trading prices from all comparison perspectives. In this sense, the average price of BRL 2.77 per liter in May, based on Ribeir\u00e3o Preto and with taxes, presented a decline of 3.39% in the short term, compared to the previous month, together with a decline of 9.81% from the same moment last year, already adjusted by inflation, besides a decline of 18.28% from the five-year average in the same period, also adjusted by inflation.<\/p>\n\n\n\n
Basically, SAFRAS & Mercado warns that this pattern of deceleration occurred due to the seasonality of the period, with prices reacting to the strong level of expansion in ethanol supply for the new 2024\/25 crop, which has rapidly advanced over cane fields of the Center-South. This fast progress stems from the dry climate over the region\u2019s cane areas, in a scenario that has persisted in this way since the beginning of the second half of April. Besides May, the climate with virtually no precipitation is expected to last at least until the end of July, according to the Inment\u2019s monthly rainfall forecast maps.<\/p>\n\n\n\n
As a result, cane crushing in the Center-South should continue intense and fast at least in June and July, increasing the availability of hydrated ethanol supply by some mills. As the hydrated ethanol competitiveness standard remained firm at around 65% in May (against the 61% average seen in April), demand showed no signs of a slowdown at pumps, causing the lows seen over the month to be reduced to the bottom of BRL 2.72 per liter in the Ribeir\u00e3o Preto region. However, even before the end of the month, market conditions already led to a moderate reaction toward BRL 2.75 per liter, which reinforced the floor of BRL 2.72 per liter for hydrated ethanol in the region.<\/p>\n\n\n\n
This is a reaction to the movement of replenishment of short-term stocks by distributors who, with low stocks from scarce purchases made in May, had to return to the market on the buying side. The low demand from distributors in May was caused by their strategy of only entering the market after isolated volumes of purchases, aiming at immediate supply and lower prices in the future, which ended up partially happening.<\/p>\n\n\n\n
The result is that, upon seeing that mills would not fall back to values below BRL 2.70 per liter (at least in the region of Ribeir\u00e3o Preto and surrounding areas), distributors ended up finding themselves \u201cforced\u201d to return to the market to replenish their depreciated short-term stocks from the thin purchases made over the month. Even so, according to SAFRAS & Mercado, prices will have limited space for new reactions in June due to continuous seasonal levels of rising supply, even more so when it has not rained, which significantly benefits cane crushing.<\/p>\n\n\n\n
Thus, SAFRAS & Mercado projects the June average price at BRL 2.75 per liter for hydrated ethanol, with taxes, in the Ribeir\u00e3o Preto region, down 0.88% from the average of BRL 2.77 per liter in May. In the annual comparison, also adjusted by inflation, prices will still fall deeply, by 8.95%, besides the predicted decline of 17.88% from the five-year average for the same period, also adjusted by inflation. In the previous month, SAFRAS & Mercado had estimated an average price for hydrated ethanol at BRL 2.70 per liter, which was 2.68% lower than the effective average of BRL 2.77 in the period.<\/p>\n","protected":false},"excerpt":{"rendered":"
Porto Alegre, June 17h 2024 – The most recent data on average prices for hydrated ethanol in the physical market showed a sign of a strong level of deceleration in trading prices from all comparison perspectives. In this sense, the average price of BRL 2.77 per liter in May, based on Ribeir\u00e3o Preto and with […]<\/p>\n","protected":false},"author":15,"featured_media":64017,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[111],"tags":[],"commodity":[],"class_list":["post-63333","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-agribusiness-eng"],"acf":[],"yoast_head":"\n