A delegation from the U.S. ethanol industry recently met with Brazilian government and private sector officials to learn more about the current dynamics of the Brazilian fuel market and its ethanol production and to offer support for the country’s effort to reduce the impact of high fuel prices on consumers.
During the week of Oct. 18, the U.S. Grains Council (USGC) organized an executive mission to Brazil that included Brian Healy, USGC director of global ethanol market development; Juan Sebastian Diaz, USGC regional ethanol consultant for Latin America; Mike Lorenz, Growth Energy senior vice president of global markets; and Kelly Davis, Renewable Fuels Association vice president for technical and regulatory affairs.
“As we return to travel, Brazil was our first mission given the measurable impact a tariff elimination would have on consumers facing rising prices,” Healy said. “We also wanted to continue our technical dialogue on RenovaBio, where reciprocity with other global certification schemes would be an ideal outcome.”
Brazil’s 2021/2022 sugarcane crop was impacted by both drought and frost. That, combined with fuel demand recovery from the COVID-19 pandemic, are driving ethanol prices in Brazil to historical highs. Hydrous ethanol prices are up 60 percent compared with the previous year, and prices for anhydrous ethanol – used to blend the E27 gasoline – are also at record highs. To add to the issue, gasoline price adjustments were announced on Oct. 25, resulting in gasoline prices rising by 74 percent in 2021 and reaching $4.32 per gallon at the pump.
Consequently, the Brazilian Association of Fuel Importers formally requested that the Committee of Foreign Trade (CAMEX) issue a temporary removal of the 20 percent duty on U.S. ethanol imports to guarantee supply and alleviate prices, mainly in the North and Northeast regions of the country. Reinforcing the initiative, the U.S. delegation shared that an open arbitrage for U.S. ethanol under a zero duty has helped support the blending program in Brazil in the past by alleviating price pressures on fuels in the country.Click here to see more...