The expected resumption of growth of the national economy to 2019 may result in increased household income, a scenario that tends to heat up car sales and, consequently, increase fuel demand. The projection, made by the Center for Advanced Studies in Applied Economics (Cepea), says that ethanol should continue to have a significant share of fuel sales in Brazil. On the supply side, for the 2019/2020 South-Central crop, analysts are projecting sugarcane milling close to the previous cycle in progress. On the other hand, the allocation of sugarcane and ethanol must be readjusted. Power plants, encouraged by signs of rising sugar prices – projections indicate reductions in inventories and even overall product shortfall – should increase the percentage of sugarcane used to produce the sweetener and reduce that of ethanol. Even with this adjustment of the mix, the harvest should still be quite alcoholic, with estimates showing that approximately 60% of sugarcane will be directed to the production of biofuel. The reduction in the supply of ethanol from sugarcane, in turn, should be offset only in part by the greater availability of corn ethanol. The developments resulting from the expected scenario may also alter the proportion of cane destined to the production of hydrated and anhydrous ethanol, increasing the proportion of ethanol.
Source: Cana Rural