Brazilian consumption of hydrous ethanol hit a new record monthly high in August of 1.57bn litres, beating already record July consumption of 1.55bn litres, sugar producers’ association Unica said on Monday, as Brazilian motorists responded to the discretionary ethanol demand impetus lent by February’s gasoline tax hike. Tightening domestic credit conditions meanwhile have encouraged immediate sales rather than producer storage of ethanol.
The five main Brazilian states which account for 83% of domestic hydrous consumption all witnessed large increases in August consumption. Hydrous ethanol consumption in Sao Paulo state rose 11.2% in August YoY to hit 43.5% of overall fuel consumption, with consumption in Minas Gerais up 19.6% YoY to hit 28.6% of overall fuel consumption. But Brazilian exports suffered in the face of strong competition from domestic consumers, tumbling from 214,000 litres in July to just 94,000 litres in August.
Strong YoY growth in ethanol production continued into the first half of September despite heavy rains which cut the cane crush by a whopping 37% MoM and by 25% YoY. Exports of Brazilian ethanol in September so far sit at 99,000 litres.