Platts extends proposal to launch CFR India anhydrous grade bioethanol assessments

Platts, part of S&P Global Commodity Insights, has extended the feedback period on its proposal to launch two weekly anhydrous grade ethanol assessments on a CFR India basis.

The proposed launch date for these new assessments would now be Nov. 11.

Platts originally proposed in a note published Aug. 11 to launch two CFR India bioethanol assessments effective Oct. 6. The initially proposed assessments would reflect cargoes delivered 35-50 days forward from the date of publication and cargoes delivered 50-80 days forward from the date of publication. However, following market feedback, Platts is now proposing that the assessments reflect shipment one-month-ahead (M1) and two-months-ahead (M2) from the month of publication. The laycans would roll over to the next calendar month on the first Tuesday of the following month.

For example, from Sept. 1 to Sept. 30, Platts would assess:

October Shipment (M1)

November Shipment (M2)

These assessments would roll on Oct. 1, and on the following Tuesday, Platts would assess:

 November Shipment (M1)

December Shipment (M2)

Platts understands that, on a CFR India basis, the M1 laycan is the most liquid in the first quarter of a calendar year, while the M2 laycan is more liquid during the rest of the year.

Platts has observed that the bulk of the material that is imported into India is from the US and Brazil. However, shipment timelines vary throughout the year, tracking different liquidity periods. The two laycans are aimed at capturing the bulk of this spot trading activity.

The launch of the CFR India anhydrous grade ethanol assessment would capture increasing ethanol imports into India from the US, Brazil and other locations.

The launch would also align with the increasing need for pricing transparency in the region.

The proposed assessments would reflect denatured anhydrous grade with a purity of more than 99% ethanol by volume.

The assessment would reflect a parcel size of 3,000-5,000 mt. Other volumes may be taken into consideration, but would be normalized back to 3,000-5,000 mt. An ethanol cargo being shipped to Indian ports by a ship could carry multiple parcels.

The assessments would consider cargoes shipped to the Indian ports of Nhava Shiva and Mundra on a CFR basis. Cargoes shipped to the other Indian ports meeting the quality specifications may be taken into account but would be normalized back to the basis location.

The proposed CFR India assessments would reflect a letter of credit of 180 days from the date of transaction. For price information with usance of less than 180 days, the value of the extra credit allowance would be normalized.

The proposed assessments would be published in $/mt.

The proposed assessments would reflect the latest information sourced from the market up to the close of the assessment window at 16:30 Singapore time on Tuesdays and follow the Singapore calendar.

In the absence of CFR India pricing data, Platts may look at related markets, such as the Platts Chicago Terminal (AALRI00) ethanol benchmark, and factors such as quality premium, insurance, freight and other costs, or other adjacent ethanol market information.

The proposed weekly assessments would be published on Platts Biofuels Alert page 0014, in the daily Platts Biofuelscan and Weekly Ethanol report.

Platts invites feedback, comments and questions on this proposal by Oct. 13 to MRTS_biofuelsandfeedstocks@spglobal.com and pricegroup@spglobal.com.

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.