(ADPnews) - Oct 20, 2010 - The prices of hydrous ethanol could rise to of BRL 1.80 (USD 1.06/EUR 0.768) per litre at fuel stations during the period between the sugar cane harvests, the president of consultancy firm Datagro, Plinio Nastari, projected on Monday.
By comparison, the average price of hydrous ethanol in Sao Paolo state for last week was USD 0.589 (EUR 0.427) per litre. The high prices will be registered during the harvest season 2011/12 as well, he added.
During the next harvest year, from April 2011 through January 2012, ethanol consumption will absorb all the existing supply.
Amid the higher prices of ethanol, Petrobras should prepare to increase petrol (gasoline) volumes available at its petrol stations.
Imports of petrol will probably be needed to meet the demand.
In case there is a 5% increase in the supply of sugar cane in 2011/12, the additional feedstock will be used for the production of sugar because of the higher returns, Nastari noted.
Brazil's exports of ethanol will start rising again only when the sugar cane production goes back to an effective growth, which is seen to happen in 2012/13. In this period, apart from the bigger supply of sugar cane, Datagro expects that the USA will already have suspended the subsidies to local wheat ethanol producers and removed the taxes levied on ethanol imports from Brazil. The elimination of both subsidies and import tax is expected at the end of 2011.
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