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Brazilian hydrous ethanol sales in January down 10.2% on year: ANP

Highlights

Hydrous ethanol sales in Jan at 1.7 billion liters

Gasoline sales in January increase 0.2% on year

New York — Brazilian hydrous ethanol sales in January were 1.7 billion liters, a drop of 10.2% on the year, while gasoline C, blended with 27% anhydrous ethanol, increased by 0.2% in the same period, showed data released by the Brazilian National Agency of Petroleum, Biofuel and Gas, ANP on March 1.

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From Brazil's total E100 sales, 91% or 1.54 billion liters were sold in Center-South, a drop of 9.3% on the year, while in the North and Northeast region the biofuel demand was at 158.7 million liters a plunge of 18% from January 2020.

In the fossil fuel market, gasoline sales in CS Brazil were recorded at 2.21 billion liters, up 0.7% year on year, and 956 million liters in the NNE region, down 1% on the year.

Brazilian flex-fuel drivers, who have the possibility to fuel their tanks with hydrous ethanol or gasoline, have been mostly favoring the gasoline consumption since March 2020 when the first impacts of the social isolation measures started to hamper the light fuel demand in the country.

In 2020 Brazilian hydrous ethanol sales was at 19.25 billion liters, down 14.6% on the year while gasoline sales lowered by 6.1% to 35.82 billion liters.

That consumption trend is expected to change in February, mainly in the NNE regions, where fuel distributors have been reporting an increased demand for hydrous ethanol, which can be explained by the wider price differential between the E100 and the gasoline at the pumps.

According to ANP weekly price release, hydrous ethanol in January was at an average of Real 0.89 cent/liter cheaper than gasoline in North Brazil while in February that price spread rose to Real 1.08/liter.

That same movement was observed in the Northeast states too, where the average price of hydrous ethanol was at Real 1.03/liter discount over the gasoline in January and jumped to Real 1.11/liter in February.

In Brazil there is a strong market consensus about consumers from the NNE making their fuel's choice depending on the psychological price differential of over Real 1/liter and not tracking the technical price parity of hydrous at the threshold of 70% of the gasoline price, where it becomes more financially attractable.

In the upcoming weeks, fuel distributors are expected to pass along the recent hydrous ethanol price increase observed in the ex-mill bases, and hydrous ethanol sales is estimated by some sources to fall to 1.3 billion and 1.45 billion liters in March.