ETHANOL PRICES IN BRAZIL PLUNGE

The collapse in the price of ethanol over the past three months has been astonishing (chart). With the harvest season barely beginning, the price is the lowest it has been since Q3 2007, when the sugarcane harvest was in full swing.

Compounding the problem is the fact that the country suffers from insufficient storage capacity – a problem that the government, through BNDES, has set out to tackle (previous post). In March, BNDES announced that it would channel USD 1.1 billion towards the construction of storage facilities for up to 1.32 billion gallons of ethanol. The stated goal is to allow for a more even flow of the fuel to the market throughout the year.

BRAZIL ETHANOL PRODUCERS PLEASED WITH LCFS DECISION BY THE CALIFORNIA AIR RESOURCES BOARD

A series of initiatives to ensure that Brazilian producers have greater access to foreign markets are coming to fruition. Unica’s lobbying efforts in California are a case in point: on April 24, the California Air Resources Board “vote(d) to recognize sugarcane ethanol’s carbon reduction levels”, recognizing that “sugarcane ethanol’s carbon intensity is even lower than initially calculated” by the Board. Unica believes that the “decision means sugarcane ethanol will be in greater demand in California in the years to come”.

The CARB resolution caps the efforts initiated by Unica around the year 2000, when the organization’s officers, including former president Eduardo Pereira de Carvalho and Alfred Szwarc, its point man for emissions and technology, began making regular pilgrimages to California, where they met with officials at different state government agencies and laid the groundwork for CARB’s decision in April.