Brazil's Ethanol May Have Hit Bottom


"Brazil's swap curve for hydrous ethanol follows the sugarcane harvest, which spans from April to December."

Platts, Guilherme Kfouri

Ethanol prices in Brazil may have already reached a bottom for the 2011-12 marketing year, data from Brazilian derivatives clearing house BM&F Bovespa shows.

The prices refer to duty-unpaid hydrous ethanol delivered at mills in the city of Paulinia, in the state of Sao Paulo.

Brazil's swap curve for hydrous ethanol follows the development of the sugarcane harvest in the center-south region of the country, which runs from April to December.

Cane harvesting reaches full swing in July, when prices typically hit a bottom for the season.

A poorer-than-expected 2011-12 sugarcane harvest and heated demand for the biofuel held ethanol swaps about 40% higher than in 2010, when July paper was pricing at Real 821.50/cu m.

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