Brazil is expected to have record ethanol exports to Europe in 2022

Brazil is expected to set a record for ethanol exports to Europe this year, shipping more than 600 million liters of the biofuel, with the country finding a better market abroad than domestically, according to an analysis by S&P Global Commodity Insights provided to Reuters.

In addition, the price of E10 fuel (gasoline with 10% ethanol) compared to the higher price of gasoline at the pump has increased demand this year in major consuming countries such as Germany, the UK, and Sweden.

The last record registered by Brazil in exports to the continent was in 2010 when the country sold 477 million liters, said Beatriz Pupo, senior biofuels analyst at S&P, author of the report.

This year, the accumulated exports to Europe between January and August totaled 427 million liters, a volume 435% greater than the same period in 2021.

In August alone, 119 million liters were shipped, the highest monthly result in 2022.

The agency evaluates that this growth, registered since June, is a response from the sugar-energy sector to the reduction in fuel taxes and the drop in domestic ethanol prices, as the biofuel falls back to accompany gasoline reductions made by Petrobras.

According to S&P, however, the forecast may run into storage difficulties for ethanol in the Amsterdam-Rotterdam-Antwerp trading hub.

“As a result of high imports, inventory levels in the Amsterdam-Rotterdam-Antwerp trading hub have increased, as extremely low water levels on the Rhine have disrupted barge transport,” Pupo said.

With information from Forbes