The most recent data from the Ministry of Agriculture (MAPA) regarding anhydrous and hydrated ethanol stocks accumulated in the Center-South up to January 10 show a scenario open to two types of interpretation. In the short term, we have the natural evolution of stock consumption in line with the seasonality of the period, since we are in the second month of the off-season. However, if we look at the current volumes, both of anhydrous and hydrated ethanol, and compare them with the same moment of the previous year and the 5-year average for the same period, we can see high levels of accumulation.
So much so that the capacity to meet the demand of the Center-South for anhydrous and hydrated ethanol remains around the comfortable mark of 3 months, which guarantees plenty of time for the new 2025/26 crop to start calmly before stocks reach possible critical consumption levels. Another important point is the complement of the corn ethanol supply in the Midwest region, which helps to maintain the stocks of cane ethanol in the Center-South at relatively high supply levels.
The current volumes of anhydrous ethanol accumulated in the Center-South available for sale up to January 10 were 3.51 bln liters, an increase of 8.63% compared to the same period last year, a decrease of 8.81% from the previous fortnight, and an increase of 20.29% from the 5-year average for the same period, which currently stands at 2.92 bln liters. Hydrated ethanol accumulated stocks available for sale up to January 10 of 5.21 bln liters, up 5.85% from the same period last year, down 11.98% from the previous fortnight, and up 19.96% from the 5-year average for the same period, which currently stands at 4.34 bln liters.
Considering an average demand for hydrated and anhydrous ethanol in January of 1.79 and 1.00 bln liters, respectively, in the Center-South (from distributors to mills, according to SAFRAS & Mercado’s expectations), we can see that the January volumes of anhydrous and hydrated ethanol stocks (3.51 and 5.21 bln liters, respectively) should result in a demand fulfillment rate of 3.52 months for anhydrous ethanol and 2.91 months for hydrated ethanol in January, considering the demand estimate from SAFRAS & Mercado and the accumulated stock volumes up to the 10th of this month, recently updated by MAPA.
There is, of course, a slight decline from the levels of these same rates seen in December, when hydrated ethanol stocks could meet demand for 3.36 months, and anhydrous ethanol stocks for 3.75 months. Even so, levels close to three months for hydrated ethanol (currently at 2.91 months) continue to provide relative comfort to the market based on the capacity to meet demand, especially when we consider that January is a month of weak demand and that in February there is already the first wave of mills beginning cane crushing for the new 2025/26 crop in the region in advance. Moreover, SAFRAS & Mercado estimates that in February there will be 15 mills starting the new crop in the Center-South, with a volume 33% higher than the average of 10 mills that usually begin the cane crushing process in advance during this period. Besides, SAFRAS & Mercado warns that the corn ethanol supply has been increasing more and more, both in production volume and in supply share compared to cane, which will further help to create a scenario of comfort in the supply of ethanol during the off-season, maintaining reduced pressure on stocks over the first quarter of the year.
Finally, we have the highest stock consumption rates for hydrated and anhydrous, at least in the first half of January, when hydrated ethanol consumed 709 mln liters of its stocks in the first half of the month alone, while anhydrous consumed 340 mln liters. Compared to the previous two weeks, the hydrated consumption rate increased by 92%, compared to the consumption of 368 mln liters in the second half of December, while anhydrous saw a 45% increase in its consumption rate, compared to the demand of 234 mln liters in the second half of December.
