Brazil’s 2020 cumulative ethanol sales down 11.9%: ANP – S&P Global

Highlights

Hydrous ethanol sales in 2020 down 14.6% on year

Cumulative anhydrous demand fell 6.1% on year

Santos — Brazilian total ethanol sales in 2020 added 28.93 billion liters, down 11.9% compared to the previous year, showed data released by the National Agency of Petroleum, Gas and Biofuel – ANP on Feb. 1.

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From the total sales, 19.25 billion liters or 66.6% were hydrous ethanol, which is used as a standalone biofuel E100 in Brazil and the balance or 9.67 billion liters were anhydrous ethanol, which in Brazil is used in a mandatory blended of 27% in the gasoline.

Reflective of the social isolation measures imposed in the country since mid-march 2020 and the lower international oil prices in 2020, the hydrous ethanol sales was mostly affected and plunged of 14.6% when compared to 2019, while anhydrous demand fell 6.1% in the same period.

Due to its lower energy content, hydrous ethanol offers an economic advantage for flex-fuel drivers whenever its price is up to 70% of the gasoline, therefore any lower gasoline price can be translated in a lower E100 demand.

While the cumulative numbers were still mirroring the plunged fuel demand between March and August 2020, when the country was going through the most restricted measures, the December total ethanol sales pointed to a decrease of 5.2% on year, suggesting a demand reinstatement.

Brazilian hydrous ethanol sales in December totaled 1.93 billion liters down 9.4% on year, while anhydrous demand was at 1 billion liters, up 4.3% on year.

In December 2019, total ethanol sales increased 8.7% from November of the same year, while in the last December the month on month demand rose 14.3%, proving that despite the seasonal higher fuel demand due to the holidays period, there was an additional gain partially explained by the lighter social restrictions.

The hydrous ethanol share in the Brazilian total light fuel sales lowered from 48.1% in 2019 to 47% in 2020, despite the drop the percentage was still higher than 2018 when the country had 46.1% of its light fuel demand supplied by the E100.

Market participants were expecting that in 2021 the monthly sales will keep showing a month on month increase, as the country started the vaccination process and most of the schools restarted normal classes, which might contribute to a higher fuel demand in the country.

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