Supply and Demand: Ethanol Prices Drop After Decrease in Fuel Demand

Written by Roberta Souza

Published on 11/12/2021 at 09:42

Updated on 11/12/2021 at 10:17

fonte: reprodução

Be the first to react!

With Prices Close to Gasoline, Ethanol Ceases to Be Consumers’ First Choice and Sees Value Decrease at Fuel Stations

After reaching a price of R$ 5.499 per liter last month, the price of ethanol began to drop at fuel stations in the city of Rio Preto. The high price charged by vendors led to a decrease in competitiveness between ethanol and gasoline — which has become the first choice for a good portion of drivers at the pump. Consequently, the lower demand for the fuel caused prices to fall.

A survey by the National Agency of Petroleum, Natural Gas and Biofuels (ANP) showed that the highest price for ethanol in Rio Preto is R$ 4.999. However, this value is still outdated compared to the current prices in the market, since the last available quote refers to the week from November 27 to December 4.

Since the beginning of the week, drivers found the liter of ethanol being sold at R$ 4.749 — a decrease of R$ 0.75, or 13%, compared to the maximum price registered last month.

ARTICLE CONTINUES BELOW

See also

“This result is the outcome of a shift in supply and demand,” said Antônio de Padua Rodrigues, technical director of the Sugarcane Industry Union (Unica). He states that the industries had a restricted supply of ethanol, not compatible with demand.

“With the drop in demand in October and November, the equation reversed, leading to stocks becoming larger than current demand. Therefore, we could see a decrease of 11% in both hydrated ethanol and anhydrous ethanol in the last 30 days.”

In recent days, the average price of hydrated ethanol in the state of São Paulo was quoted at the mills for R$ 3.459 (not considering freight and taxes), according to Cepea. At the end of October, the price per liter was R$ 3.828. Meanwhile, anhydrous ethanol was priced at R$ 4.000 per liter at the end of last week, compared to an increase of R$ 4.5353 per liter at the beginning of last month.

This scenario could also lead to a decrease in gasoline prices, as it contains 27% anhydrous ethanol in its composition. “The 11% drop in the price of anhydrous ethanol has not yet reflected in gasoline prices, nor has it reached hydrated ethanol, but it will probably arrive at some point. The decrease has already occurred for producers; now the market is free for both distribution and resale,” recalls Antônio.

The Price Trend for Ethanol Is Downward

The economist from the School of Business and Economics (FEA) of USP, Luciano Nakabashi, reiterates that gasoline is the first choice for drivers when the price of the biofuel exceeds a margin of 70% compared to fossil fuel. “Today, in most places, the price of ethanol is more expensive than 70% of the price of gasoline.”

According to the specialist, after reaching a peak, the trend is for fuel prices to continue to fall next year. “Prices may remain at high levels, but I find it quite difficult for them to rise more than they are,” he states. Also, according to Nakabashi, the new variant of the covid-19 may influence the global economy. “If there is such an effect, it will be a reduction in oil prices.”

According to the economist, since oil is related to the foreign market, it influences the price fluctuations of other fuels, similar to the case of biofuel. “Gasoline affects the price of ethanol much more than the reverse.”

Commission Approves Project to Stabilize Prices

The Commission of Economic Affairs (CAE) of the Senate approved on Tuesday, December 7, a bill that establishes a plan to stabilize the price of oil and its derivatives in Brazil and imposes a change in Petrobras’ pricing policy. The project was revealed in the context of dissatisfaction over rising fuel prices. The text will go to a plenary vote. If approved, it will need to be reviewed by the Chamber of Deputies.

The bill aims to change Petrobras’ pricing policy for adjustments, which is based on the variations of global oil barrel prices and exchange rates. Under the plan, national prices defined by producers and importers of oil derivatives will need to reference average quotes from the foreign market, internal production costs, and import costs, “where applicable.”

Supply and Demand: Ethanol Prices Drop After Decrease in Fuel Demand

With Prices Close to Gasoline, Ethanol Ceases to Be Consumers’ First Choice and Sees Value Decrease at Fuel Stations

See Also:

The Price Trend for Ethanol Is Downward

Commission Approves Project to Stabilize Prices

A village with 115 inhabitants wants new residents: it offers a house, a job, up to 44 thousand euros in benefits, almost free rent, an annual grant of 8 thousand euros for 3 years, and a 20 thousand euro incentive for businesses in the mountains of Italy.

NASA is offering US$ 750,000 to people from anywhere in the world who solve a problem that could decide survival on Mars: creating food for astronauts without relying on resupply from Earth.

Belgium will sink 23 giant concrete caissons, each weighing 22,000 tons, in the North Sea to build the world’s first artificial energy island 45 km off the coast, forming offshore electrical walls.

New microwave that can replace three appliances hits the market: Sharp launches 3-in-1 model that combines air fryer, convection oven, and heating in 0.9 cubic feet for small kitchens

While Brazil has been discussing bullet trains for 16 years, China delivers 5 new high-speed lines in 2026, surpasses 50,000 km of HSR, and moves 1 billion passengers in a single year.

While countries spend billions to draw water from the sea, a Nobel-winning scientist creates a container-sized machine that extracts up to 1,000 liters per day from dry air and uses ultrasound to release water in minutes, even in the middle of the desert.

With an 88-meter wingspan, a capacity of 250 tons, six engines, and 32 wheels, the Ukrainian giant became the greatest symbol of extreme air transport and one of the most impressive machines in aviation history.

A 45 km² oil slick appears in satellite images near Kharg Island, an area that accounts for 90% of Iran’s oil exports.

While the world spends energy to refrigerate food, Japanese architects create a wooden refrigerator powered by snow that preserves rice without a compressor, helps mountain farmers, and transforms extreme cold into profit in the countryside.

Submarine robot Redwing departs on a historic 5-year mission to attempt to circumnavigate the globe without a crew, silently crossing oceans while measuring temperature, salinity, and currents to predict hurricanes and climate change.

A 60 m² steel frame house is completed in 40 to 90 days for R$ 2,800 per m² installed, generates only 1% waste compared to up to 30% for conventional masonry, and can already be financed by Caixa for up to 30 years with the use of FGTS.

A 1960s luxury bus that belonged to the family of Mamonas Assassinas has been transformed into accommodation with a hot tub, skylight, and a deck overlooking rock formations in Alfredo Wagner, 130 kilometers from Florianópolis, and is already accepting reservations via Airbnb.

Supply and Demand: Ethanol Prices Drop After Decrease in Fuel Demand

With Prices Close to Gasoline, Ethanol Ceases to Be Consumers’ First Choice and Sees Value Decrease at Fuel Stations

See Also:

The Price Trend for Ethanol Is Downward

Commission Approves Project to Stabilize Prices

A village with 115 inhabitants wants new residents: it offers a house, a job, up to 44 thousand euros in benefits, almost free rent, an annual grant of 8 thousand euros for 3 years, and a 20 thousand euro incentive for businesses in the mountains of Italy.

NASA is offering US$ 750,000 to people from anywhere in the world who solve a problem that could decide survival on Mars: creating food for astronauts without relying on resupply from Earth.

Belgium will sink 23 giant concrete caissons, each weighing 22,000 tons, in the North Sea to build the world’s first artificial energy island 45 km off the coast, forming offshore electrical walls.

New microwave that can replace three appliances hits the market: Sharp launches 3-in-1 model that combines air fryer, convection oven, and heating in 0.9 cubic feet for small kitchens

While Brazil has been discussing bullet trains for 16 years, China delivers 5 new high-speed lines in 2026, surpasses 50,000 km of HSR, and moves 1 billion passengers in a single year.

While countries spend billions to draw water from the sea, a Nobel-winning scientist creates a container-sized machine that extracts up to 1,000 liters per day from dry air and uses ultrasound to release water in minutes, even in the middle of the desert.

With an 88-meter wingspan, a capacity of 250 tons, six engines, and 32 wheels, the Ukrainian giant became the greatest symbol of extreme air transport and one of the most impressive machines in aviation history.

A 45 km² oil slick appears in satellite images near Kharg Island, an area that accounts for 90% of Iran’s oil exports.

While Petrobras operates at 7,000 meters in the pre-salt layer, China is extracting oil and gas at 10,910 meters onshore — Shenditake 1 is the world’s first onshore well to exceed 10 km.

Brazil discovers natural hydrogen in four states and enters the silent race that could redraw the energy transition: Petrobras has already invested R$ 20 million in studies.

Trump promises transparency in Venezuela’s oil, but secret deals and corruption allegations continue to surround the billion-dollar sector.

Oil near US$100 raises tension on Wall Street and amplifies global fear about inflation, energy, and the Middle East crisis

A 45 km² oil slick appears in satellite images near Kharg Island, an area that accounts for 90% of Iran’s oil exports.

While the world spends energy to refrigerate food, Japanese architects create a wooden refrigerator powered by snow that preserves rice without a compressor, helps mountain farmers, and transforms extreme cold into profit in the countryside.

Submarine robot Redwing departs on a historic 5-year mission to attempt to circumnavigate the globe without a crew, silently crossing oceans while measuring temperature, salinity, and currents to predict hurricanes and climate change.

A 60 m² steel frame house is completed in 40 to 90 days for R$ 2,800 per m² installed, generates only 1% waste compared to up to 30% for conventional masonry, and can already be financed by Caixa for up to 30 years with the use of FGTS.

A 1960s luxury bus that belonged to the family of Mamonas Assassinas has been transformed into accommodation with a hot tub, skylight, and a deck overlooking rock formations in Alfredo Wagner, 130 kilometers from Florianópolis, and is already accepting reservations via Airbnb.