Santos — Brazilian hydrous ethanol sales in June totaled 1.33 billion liters, an increase of 5% from May, but a drop of 22.8% year on year, the national petroleum, biofuel and gas agency ANP's data showed late July 31.
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Total ethanol sales and gasoline A combined were recorded at 4.05 billion liters, down respectively 18.1% and 7.9% on the year. The Brazilian gasoline C has 27.5% of anhydrous ethanol blended.
In the third consecutive month of social isolation measures in the entire country, the light fuel sales rate increase has been a good barometer of economic activity in the country.
April recorded light fuel sales at 3.49 billion liters amid the coronavirus pandemic, and since then the month-on-month increase has been 7.8% and then 7.69%. Distributors said the daily rate increase in light fuel sales has been falling, suggesting that that volume sold in July will bring a slight increase from June.
The biofuel E100's market share in the Brazilian Otto cycle was at 25.6% in June, down from 26.2% in May and from 29.1% in June 2019.
Otto cycle is a combination of hydrous and anhydrous ethanol and gasoline A.
Hydrous ethanol's loss in market share has been a big question for the producers and distributors, who were unable to find a price logic behind it.
In June the average hydrous ethanol price parity in the Southeast and in the Center-West regions was respectively at 64.41% and 67.52%, below the 70% threshold that suggests an economic advantage for flex-fuel drivers to fuel their tanks with the E100.
In June, both SE and CW regions combined answered for 85.9% of the total Brazilian hydrous ethanol sales.
Cumulative ethanol sales in the first six months of 2020 were at 13.4 billion liters, down 14.9% on the year, while gasoline A sales reached 12.01 billion liters, a drop of 11%.
Hydrous ethanol sales were at 8.96 billion liters, a plunge of 16.7% from the first six months of 2019.
In the next six months of the year, Brazilian fuel sales are expected to increase as the quarantine is lifted. However, there are many uncertainties about fuel demand going forward.
In Sao Paulo state -- which accounts for 31% of the Brazilian light fuel demand -- schools are expected to partially reopen in September, which could cause a further increase in fuel demand.
However, it is difficult to forecast consumption behavior as some might prefer to not drive their kids to school.
S&P Global Platts Analytics estimates that Brazilian Otto cycle will fall by 10% in 2020 from 2019.