Brazil Cut Mandatory Ethanol Mix Into Gasoline to 20%

Brazil cut the mandatory amount of ethanol mixed into gasoline to 20 percent from 25 percent after stocks fell, the government said today.

The new ethanol requirement will take effect from Feb. 1 and last 90 days, the Agriculture Ministry said today in an e- mailed statement.

Brazil decided to cut the ethanol level after stocks of the bio-fuel waned at the end of the sugar cane harvest. Ethanol prices rose to 67 cents per liter last week, the highest since at least July 2007, according to weekly prices tracked by Esalq.

Ethanol production in Brazil’s Center South, the world’s largest sugar-producing region, fell 8.3 percent last year to 22.2 billion liters (5.86 billion gallons) compared with a year earlier, industry association Unica said Dec. 15. Above-average rainfall in Brazil’s Center South hindered harvesting that ended last month and reduced yields.

About 90 percent of all new passenger vehicles in the country have so-called flex-fuel engines, which can run just on ethanol or any mix of the biofuel with gasoline.

source: bloomberg