SALES OF HYDROUS ETHANOL IN BRAZIL DROP 14.8% IN ONE MONTH

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Sales of hydrated ethanol dropped to 333 million liters in April 2006, 14.8% below the amount measured in March and 2.11% below April ’05, according to data released by the Brazilian National Petroleum Agency (ANP). In April, when ethanol prices reached all-time highs, consumption was at its lowest level in fifteen months, after having peaked in December, when it reached 509 million liters.

The data from December had been inflated due to a change in legislation, sponsored by ANP, that required refineries to color the product in order to avoid fraud, as some of the hydrous ethanol (ethanol mixed with C Gasoline), was being sold as if it were anhydrous. Sales have decreased since then, drawing back to 465 million liters in January, 444 million in February, and 390 million in March ‘06.

The drop in sales for hydrous ethanol followed the general tendency for fuels in Brazil in April, according to the data released by the government agency. The total sales of fuels by distribution companies totaled 6.93 billion liters, with a 4.3% drop in relation to April ’05 and 9.3% less than in relation to March ’06. The greatest drop was seen in diesel, which sold 9.02% less than in April ’05. The decrease reflects the low consumption by farms, which have been affected by a drop in agricultural production, by the low international prices of export commodities, and by the drought which has hit the South of Brazil. Farms are one of the biggest users of diesel oil.

C Gasoline, mixed with ethanol, was the only fuel that saw an increase in consumption in April, out of the eight that are tracked regularly by ANP. In all, 1.92 billion liters were sold in that month, with a 1.04% increase in relation to the level sold in April 2005. In relation to March ‘06, however, there was a drop of 5.14%. Due to the high prices for hydrated ethanol in April ’06, gas became the more interesting alternative for owners of flex-fuel vehicles, who bought less ethanol in that period.

Hear it from the horse's mouth - follow what's happening in the Brazilian ethanol market on Ethablog, the only blog in English dedicated to Brazilian ethanol.