Petrobras’ 12% cut to gasoline prices to increase gap between sugar and ethanol prices to highest since 2011

In Brazil, Reuters reports that Petrobras’ latest shift to gasoline prices has forced the gap between sugar and ethanol prices to 11.34 cents per pound, according to Czarnikow data, the highest in 12 years. Sugarcane mills are already pumping out as much sugar as possible thanks to unusually hight global sugar prices, so Petrobras’ move to cut gasoline prices by 12% won’t force mills to produce even less ethanol than before, it will just make the ethanol that is produced less competitive.