Brazil Weighs Raising Ethanol Blend in Boost to Consumers, Mills

Brazil, the world’s second-largest ethanol producer, is considering raising the ethanol blend in gasoline. The move would lower pump prices for consumers amid rising fuel costs and increase domestic ethanol demand, helping sugar-cane mills cope with a biofuel supply glut. Expect modest positive effects on sugar-cane mill demand and local fuel-market dynamics, with limited near-term macro impact outside related commodities and fuel sectors.

Analysis

Brazil, the world’s second-largest ethanol producer, is considering raising the ethanol blend in gasoline. The move would lower pump prices for consumers amid rising fuel costs and increase domestic ethanol demand, helping sugar-cane mills cope with a biofuel supply glut. Expect modest positive effects on sugar-cane mill demand and local fuel-market dynamics, with limited near-term macro impact outside related commodities and fuel sectors.