In theory Petrobras adjusts the gasoline price in Brazil (which in turn impacts on ethanol prices) in line with the cost of importing from the world market although recent behaviour has not always followed that pattern. In August it raised gasoline prices significantly (by 16%). While the sugar mix is at record levels the very large cane crop also means plentiful ethanol. This, combined with weak demand, has put pressure on prices with the hydrous:gasoline pump ratio in Sao Paulo state sitting around 61%.
The prospects for EU beet molasses production depend heavily on the late summer weather and the recent improved conditions, following dry weather in the east and south of the bloc earlier in the summer, has improved the production outlook.
Meanwhile cane molasses prices have remained firm, with future availability in Asia being dependent upon the monsoon in India and the potential impact of El Nino. The current dry conditions in several northern hemisphere producers are likely to support prices in the foreseeable future.