Brazilian mills still riding a sugar high to ethanol’s detriment

In Brazil, mills will continue to produce more sugar than ethanol in 2017 as the industry continues to ride higher sugar prices before the global supply deficit swings towards a surplus later in the year that will weigh on prices again. CEPEA expects hydrous ethanol production to fall in light of recent tax changes that makes the fuel even less competitive with gasoline while strong export demand for anhydrous fuel and the need to blend it with the currently more-affordable gasoline at the pump will drive production.