Brazilian millers will favor ethanol production over sugar, at the beginning of this harvest season, due to low sugar prices, Bloomberg reported citing Raízen, a joint venture of Royal Dutch Shell Plc and Cosan.
Petrobras, Brazil’s state-controlled oil company, increased gasoline prices at refineries by 6.6 percent last week. The government also said it will raise the amount of anhydrous ethanol blended into gasoline to 25 percent in May from 20 percent now.
According to Ivan Melo, Raizen’s commercial director, these two measures will help boosting the demand for the biofuel. “With gasoline prices rising 6.6 percent, hydrous ethanol is now more competitive. If the harvest starts with sugar prices at current levels, we will begin the season with more incentive to make ethanol” Melo said in an interview to Bloomberg