Petrobras may cut gasoline prices that would in turn hurt ethanol producers

In Brazil, Petrobras may cut pump prices for gasoline and diesel for the first time since September 2015 to bring them inline with international competitors but doing so will put a major squeeze on ethanol producers. The state-owned company’s capacity to set prices has been liberated, allowing it to change prices from one day to the next without requiring government approval beforehand. Mills are currently favoring sugar because of higher prices, so if ethanol demand drops due to lower gasoline prices then sugar will be favored even more.