Anhydrous ethanol stocks in Brazil's Center-South region stood at 3.95 billion liters in mid-November, down 12% from a year ago, data from the Agriculture Ministry showed late Friday.
The total includes fuel and industrial-grade product.
A combination of lower anhydrous production in the CS, consumption growth in the North-Northeast region and the unexpected surge in Brazilian exports in recent months have put pressure on stocks.
Since the beginning of the 2015-16 sugarcane season in April through mid-November, anhydrous production in the CS amounted to nearly 9.5 billion liters, down 8% from same period last year, data from industry association UNICA showed. The season typically runs from April to mid-December.
Anhydrous domestic fuel demand in the CS for January through October totaled 6.5 billion liters, down 4% from the year-ago period, data from the National Petroleum Agency showed.
But in the NNE, anhydrous consumption during the same period increased 5% to 2.48 billion liters. Part of consumption in the NNE has been met by the CS, as production in the NNE meets about 38% of local demand, according to Platts agricultural analysis unit Kingsman. The US has been a main supplier of anhydrous ethanol for the NNE, which has imported 402 million liters from foreign countries this year.
Kingsman expects a tight situation during the intercrop period. On April 1, anhydrous stocks are expected to reach roughly 500 million in the CS, compared with 1.3 billion liters on April 1, 2015. The stocks situation could be tighter once exports and transfers to the NNE during first-quarter 2016 are taken into account.
In the NNE, the situation appears even tighter, with a deficit forecast for April 1 of almost 500 million liters. NNE stocks were at 203.5 million liters on April 1, 2015. The region is expected turn to imports of anhydrous from the US to meet some of the deficit not offset by transfers from the CS.
In 2011, when anhydrous stocks in the CS were below 400 million liters by April 1, the government reduced the mix into gasoline to 20% and from April to December that year the country imported more than 1 billion liters (CS and NNE combined) of anhydrous ethanol.
Anhydrous ethanol has been mixed with gasoline at a blending rate of 27% since mid-March, when the government increased the rate from 25%.
Kingsman estimated anhydrous fuel consumption in the CS should reach 7.8 billion liters this year, down 5% from the previous year, while in the NNE consumption is expected to increase 6% to 3.05 billion liters.
