Further uncertainty in the Brazilian ethanol market has seeped through into the Ulsan market, with no bids or offers being put forward on Monday, and PRIMA’s B-grade Ulsan ethanol physical index sitting flat at 480USD/m3.
Many market participants are preparing to sit on the sidelines until there is more clarity over Brazilian CIDE gasoline tax policy swirl, after the government backed away from implementing a hike in retail gasoline taxes last month. Any potential tax hike should see Brazilian ethanol prices rise even further, after last week’s Petrobras’ increase in gasoline ex refinery prices pushed Brazilian prices for B-grade up 8% and anhydrous up 9% WoW.
This has left the window for imports of Brazilian ethanol into the US closed. The US has taken 58.5% of ethanol exports from Brazil so far this harvest season, and South Korea 21.8%. India has been the destination for 5% of Brazilian ethanol exports so far for this harvest season, sitting at 29,948m3. 20,000m3 of fuel ethanol was also shipped from the US to India in September this year, according to recent vessel line-ups, and a possible shortage in molasses in India could create more opportunities for ethanol imports later on this year.