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Argentina reduces November price cut on ethanol for refiners

Argentina’s energy ministry on Tuesday partially backtracked on a price cut on ethanol introduced earlier this month for refiners who mix the biofuel into gasoline at a 12% ratio.

The price cut has been shaved to 7.5% from 15% for sugarcane-derived ethanol, and to 10.5% from 21.1% for supplies made from corn, the ministry said in a resolution in the Official Bulletin, the government’s newspaper of record.

It said the move came after ethanol producers provided information about production costs that “had not been contemplated” in the original price calculation.

On November 2, the ministry, which sets ethanol pricing, slashed the price for sugarcane-derived ethanol by 15% to Peso 14.342/liter (82 cents/liter) from Peso 16.873/liter in October.

Now with the resolution, it has lifted the price to Peso 15.608/liter, or 7.5% less than in October.

For corn-based ethanol, the price will now be Peso 12.193/liter, or 10.5% less than October’s Peso 13.623/liter. It had been slashed to Peso 10.742/liter previously.

Ethanol producers argued the large price reduction could push some companies out of business.

Argentina’s ethanol production surged 31% to 706,839 mt in the first eight months of this year from 540,027 mt in the year-ago period, according to ministry data.

Over the same period, sales to refiners increased 24% to 700,866 mt from 564,673 mt, the data show.

Biofuelscan covers the latest worldwide biofuels news and prices and provides a daily summary of market events. Also included are price assessments for ethanol, ETBE, renewal identification numbers (RINs), biofuels and closing market price assessments from the Americas, Europe, and Asia.
Source: Platts

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