ETHANOL NEWS

APRIL 2012

In Brazil, ethanol prices increased in March but due to exchange rate movements the dollar equivalent price remained largely unchanged. The ethanol market continues to give Government problems as the low price of ethanol relative to sugar is curtailing output and investment in that sector. This is turn has led to the need to import gasoline at world prices which are in excess of domestic gasoline prices which the Government is keen to keep stable for the benefit of the motorist at the pump. However there is speculation that the Government may increase the gasoline price in April. If it does so, this will be the first time in seven years. An increase in gasoline prices would increase ethanol prices.

In the EU, T2 prices rose marginally in March. On 12^th March the Commission published its E90 decree which means that blends of E 70 and above will be subject to the denatured ethanol tariff of € 102/cubic metre.

In the USA gasoline prices have risen with ethanol prices remaining steady, thereby widening the blenders margins. Overall ethanol prices have weakened since the end of the blenders tax credit at the end of 2011.

Molasses Molasses prices fell marginally in both the EU and USA. With large Asian sugar crops being realised, export availability looks good and this is likely to have a further downward effect on prices.