Hydrous ethanol price parity passes 70% in Brazil but demand still high

In Brazil, the market may finally have had enough of ever-stronger hydrous ethanol prices so demand at the pump is starting to fall back from record consumption levels. In September, ethanol prices were just 62% of the price of gasoline in Sao Paolo state but during the first two weeks of November, prices have averaged 72%. Despite hydrous ethanol prices rising above the 70% gasoline price parity level, demand won’t likely be impacted too much during November and December because ethanol is still about a Real per liter cheaper than gasoline. If the parity level reaches upwards of 74%, then demand might start to taper off.

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