Consumption potential is 1.9 billion liters per month in the second half

Purchases that fell due to high prices of return, can regrow with increased production
by Luciana Franco

(Brazilian producers should increase the production of ethanol and reduction of sugar in 2013 - Photo: Alves Ohrmazd / Ed. Globo)

Because prices uncompetitive compared to gasoline, ethanol consumption in Brazil has fallen significantly in recent years, going from a level of 1.5 billion liters monthly, recorded in October 2009 to 809 million liters, average verified in the first quarter of 2013. Last year, the average consumption was 820 million liters per month. "We believe that with the downturn in prices already observed at gas stations across the country, consumption grows again," estimates Pliny Nastari, president of consulting firm Datagro. The potential for the second half of this year is 1.9 million gallons per month.

According to Datagro, prices paid by consumers fell 4.26% between February and June in São Paulo, while gasoline fell only 1.12%. For ethanol to be advantageous compared to gasoline liter have to cost 70% of the price of gasoline, but according to Nastari, consumers tend to choose to use renewable fuel when he is priced around 65% of the price gasoline. "The change is delayed by habit and the consumer takes a little to change fuel, but realize that it happens more often when ethanol prices cost between 60% and 65% of premium gasoline," he says.

Survey conducted by Datagro shows that prices are favorable to ethanol in various squares Brazilian, like São Paulo (price of gasoline is 65.5%), Paraná (67.43%), Mato Grosso (65.08%), and Goiás (66.93%). This year Brazilian producers must choose to increase ethanol production and reducing sugar, because of the poor rates of sugar.

Source: Globo Rural magazine