An influx of cheap US and Brazilian ethanol threatens Europe’s producers as businesses resume operations, companies have told the European Commission, urging it to act to protect an industry reeling from depressed demand, reported Reuters.
Fuel consumption declined sharply in Brazil in April, amid the impact of isolation measures taken to stem the spread of coronavirus, with demand for ethanol plummeting 49% year-on-year, said the minister of Mines and Energy, Bento Albuquerque, reported Reuters.
Brazil – 25% of sugar-ethanol plants under threat of closure amidst falling demand due to Covid-19 pandemic [Registered]
A quarter of the sugar and ethanol plants are in the danger of closing down by the end of the year because of the coronavirus crisis, according to informed sources in the country.
The dispute settlement panel of the World Trade Organisation is unlikely to come out with its report on a case against India’s support measures for the sugar sector before the second quarter of 2021 on account of “complex procedural and factual nature of the disputes”, the WTO said in a press release on 29th April.
Brazil is likely to produce 41 million tonnes of sugar in the 2020/21 campaign, according to the consultancy Job Economia, reported Reuters.
As of March 31, Brazilian mills had hedged 17 million tonnes of sugar using ICE futures contracts on the New York Stock Exchange, a large increase over the same period last year, according to Archer Consulting reported Reuters.
Ethanol production in the 2020/21 campaign is expected to fall by up to 24% compared to the 19/20 season, according to the analysis by the research economist Haroldo Torres at Pecege (Continuing Education Program in Economics and Business Management).
With the 2020/21 scheduled to commence in April, mills are expected to make a sharp switch from ethanol to sugar production as falling gasoline prices and a weak currency reduce the biofuel’s appeal, reported Reuters.
Ethanol producers are compiling a list of proposals to the federal government to bail them out amid the collapse of demand emanating from both the coronavirus outbreak and plunge in crude oil prices, reported Valor Economico.
Brazil – Fall in oil price to boost 2020/21 sugar output by 3 million to 6 million tonnes [Full subscriber]
The sharp fall in global oil prices should result in higher sugar production in Brazil in the new crop that starts in April, Ricardo Mussa, the incoming chief executive officer of the world’s largest sugar producing company, Raízen, said on 9th March, reports Reuters.