NE Asia Hydrous Ethanol Discussions Halted by Brazil Concerns
by Izham Ahmad (ICIS) Import discussions in northeast Asia’s spot hydrous ethanol market have ground to a halt on uncertainty over logistics in Brazil, which is the region’s main supplier.
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“No one is willing to give us any kind of quotations or prices due to this situation,” said a buyer in Asia.
Brazil’s hydrous ethanol is used in northeast Asia either in alcoholic drinks or in industrial applications.
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The Brazilian Truck Union (ABCAM) staged a week-long strike, which spread to 19 of Brazil’s 26 states on its first day on 21 May, to protest rising diesel prices. The strike essentially paralyzed the fuel and biofuel industry due to lack of transportation to move cargoes as truck drivers blocked roads.
The Brazilian government has since announced a deal to end the strike that, among other things, would reduce diesel prices by 10% for 15 days.
But logistics have not returned to normal even after ABCAM ended the strike as the deal with the government is still deemed tenuous and has not been fully accepted.
Brazil’s biodiesel and ethanol industries rely mostly on highways to deliver biofuels from plants to distributors, according to the country’s Oil, Gas and Biofuels Agency (ANP).
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As part of measures to mitigate the impact of the strike, Brazil on 24 May loosened its biodiesel and ethanol blending requirements as the strike made it increasingly difficult for distributors to receive the biofuels they needed to comply with the mandate.
Under the looser standards, the 10% biodiesel blending requirement was made optional and the ethanol blending requirement was lowered to 18% from 27%, ANP said.
In Brazil, hydrous ethanol is used as a stand-alone fuel in flexible-fuel vehicles (FFVs), competing directly with gasoline. READ MORE