Brazil, the world’s biggest maker of sugar cane-based ethanol, may cut the mandatory amount of the biofuel mixed into gasoline next week after rain hindered harvesting, Agriculture Minister Reinhold Stephanes said.

The government is considering cutting the mandatory ethanol content from 25 percent as early as Jan. 11, Stephanes told reporters today in Brasilia. He declined to say what the new percentage may be.

“We may have to change the mix of ethanol into gasoline because we had a problem with too much rain slowing the harvest,” the minister said.

Above-average rainfall in Brazil’s Center South, the world’s largest sugar-producing region, hindered harvesting that ended last month and reduced yields. The region’s ethanol production fell 8.3 percent from a year earlier to 22.2 billion liters (5.86 billion gallons) in the season that started March 1, industry association Unica said Dec. 15.

All gasoline sold at pumps in Brazil has to contain between 20 percent and 25 percent ethanol by law, with the exact percentage set by the government. 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


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