The United States and Brazil, the world’s top two ethanol producers, are expected to hold down production in the coming months, because of the surging cost of corn and sugar. Tight corn and sugar supplies are passing through to ethanol costs, making producers reluctant to raise production and boosting gasoline prices as well. The US and Brazil are the cornerstones of worldwide ethanol supply, accounting for 75% of global exports last year, according to S&P Global Platts Analytics. Average gasoline prices in the US are above US$ 3 per gallon for the first time since 2014, according to data from the American Automobile Association, while prices in Brazil are R$ 5. 40 per liter in June, in the state of São Paulo, near all-time highs. In Brazil, ethanol prices at local mills are close to their historical highs, above R$ 3.40 per liter, according to the Center for Advanced Studies in Applied Economics (Cepea).
Sources: Reuters/New Cana (*Translated by Ia Niani)