Brazil: Increasing Ethanol Supply Pressures Prices at the Start of the 2026/27 Harvest
According to Cepea, the increasing supply of hydrous ethanol in São Paulo's market, driven by the advancement of the 2026/27 sugarcane harvest, has led to continuous price declines. Despite last week's rain-induced milling interruptions, prices for both hydrous and anhydrous ethanol fell by 3.5%. While some buyers made small purchases, overall trading activity remained weak, with distributors acting cautiously.
According to the Center for Advanced Studies in Applied Economics (Cepea) at Esalq-USP, the São Paulo market saw a significant increase in the volume of hydrous ethanol offered last week. Researchers noted that as the 2026/27 sugarcane harvest advanced in some mills and commenced in others, many sellers expanded the availability of the fuel due to concerns about more significant price drops. In this context, Cepea's monitored data indicated daily price reductions across all producing regions in São Paulo state.
Between April 6th and 10th, the Cepea/Esalq indicator for hydrous ethanol in São Paulo state, net of ICMS and PIS/Cofins taxes, was R$ 2.7873 per liter, marking a 3.5% decrease from the previous period. For anhydrous ethanol, the Cepea/Esalq indicator closed at R$ 3.1948 per liter, net of taxes (without PIS/Cofins), also experiencing a 3.5% decline over the same comparative period. The research center further stated that interruptions in milling activities last week due to rains did not limit the downward price movement in the São Paulo market. Forecasts indicate dry weather for the coming days.
On the buying side, some purchasers acquired larger volumes due to the small acquisitions made in recent weeks, but the pace of business involving hydrous ethanol remained weak. The report added: "Distributors continue to act cautiously and close some business opportunities."