Bloomberg News

Gasoline Cargoes to Brazil May Rise on Ethanol Drop in JBC View

May 18, 2012

Gasoline shipments to Brazil from the U.S. and Europe may rise as slumping ethanol production encourages consumption of the auto fuel, JBC Energy GmbH said.

Brazilian ethanol production fell more than 40 percent from a year earlier in April, the Vienna-based consultant said in a report today, citing data from the Brazilian Sugarcane Industry Association, or Unica. Output of hydrous ethanol, sold at pumps in Brazilian filling stations, slid 18 percent, JBC said.

Brazil, the world’s biggest sugar producer, uses its sugar- cane crop to make ethanol as well as the sweetener. Shrinking ethanol supplies in the country will mean lower use of the biofuel for transportation this year, spurring demand for gasoline, JBC said.

“The implication is that further gasoline exports from the U.S. and Europe to Latin America will result,” BNP Paribas SA energy strategist Gareth Lewis-Davies said by phone today.

The share of the cane harvest from Brazil’s main growing region devoted to making sugar will reach a six-year high of 48.8 percent in the current crop year begun April 1, Antonio de Padua Rodrigues, Unica’s technical director, said last month.

About 46 percent of the country’s cars were so-called flex- fuel vehicles that can burn either gasoline or ethanol as of last year, according to Sucden Geneva SA analyst Claudiu Covrig. The figure excludes trucks and buses, Covrig said by e-mail.

To contact the reporter on this story: Rob Sheridan in London at rsheridan6@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net


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