Porto Alegre, March 10th, 2025 – The most recent data from the Ministry of Agriculture (MAPA) regarding anhydrous and hydrated ethanol stocks available for sale in the Center-South show that the volumes of both are relatively high for the time of year. Anhydrous ethanol, with its 2.34 bln liters accumulated up to the end of the first half of February, shows an increase of 12% when compared to its 5-year average for the same period, which is currently at 2.07 bln liters.
Despite this advantage in the long term, there is clearly a slowdown in the short and medium term. This is because when looking at the evolution in the margin (the comparison to the immediately preceding fortnight), we see a 9% decline, and when looking at the annual comparison (to the same fortnight of the previous year), we see a 2% decline. The same can be said about hydrated ethanol, which, accumulated at 3.11 bln liters in the first half of February, shows an increase of 7% over its 5-year average (which hovers at 2.90 bln liters) amid the declines of 13% YoY and 12% in the margin.
The seasonality of the off-season explains the short-term declines through the evolution of the margin, while the pattern of high sales at the pumps explains the declines in the annual comparison, as at the same time last year hydrated ethanol did not show the same great levels of competitiveness that it has shown over the last 7 months. However, the highlight is the strong reduction in the level of consumption of stocks in the short term.
Comparing the second half of January with the first one of February, it was possible to see that hydrated ethanol went from a biweekly consumption rate of stocks of 1.63 bln liters to 440 mln liters, with a decline of 73%. The same happened with anhydrous ethanol, which, in the same period, had its stock consumption pattern falling from 935 to 242 mln liters, down 74%.
This movement becomes even more anomalous when observing two factors. First, the Center-South region was at the peak of its cane off-season during the first half of February; second, this was a period of preparation for distributors to build up their intermediate stocks for the long Carnival holiday that was approaching during the transition from February to March. It was in the first half of February, and not the second, that distributors were most active in building up their intermediate stocks for the extra fuel consumption expected during the prolonged holiday.
In this sense, SAFRAS & Mercado warns that the reduction in the rate of stock consumption did not necessarily reflect a decline in demand, but rather the exact opposite scenario. What has in fact marked the consumption of stocks is the earlier-than-normal crushing of the new season (in this case, 2025/26) by several mills in the Center-South region. Back in January, SAFRAS & Mercado estimated that in February there would be 5 mills resuming cane crushing early in the Center-South in the first half of February, followed by another 15 mills in the second half of the month.
Now for March, SAFRAS & Mercado estimates that 40 mills will resume the cane crushing process of the new crop early in the first half of the month and another 48 in the second half of March. Throughout the off-season, it is estimated that 114 mills will start cane crushing for the 2025/26 season earlier. This processed cane will still be accounted for in the old 2024/25 crop according to the crushing calendar. Furthermore, within a universe of 260 mills estimated to come into operation in the new season, along the first quarter of the year (considering another 6 mills that were in operation in January), the Center-South will have 43% of its mills already in operation even before the official start of the crop calendar in April.
