Ethanol stocks in Brazil's Center-South at the end of December stood at 6.62 billion liters, down 22% from a year ago, data from the Agriculture Ministry showed.
The total volume includes anhydrous and hydrous ethanol for fuel and industrial usage.
Of this total, hydrous ethanol amounted to 3.15 billion liters, 34% lower from a year ago and the lowest level since 2011-12 season. The balance, or 3.47 billion liters, were anhydrous, down 6% year on year.
A sharp drop in stocks is a result of strong demand for hydrous fuel in the domestic market.
Since the beginning of the sugarcane season in April through end-December, ethanol sales (fuel and industrial) to the domestic market totaled 13.88 billion liters, up 37% compared with same period a year earlier, according to the latest report from industry association UNICA.
Hydrous is used in Brazil as a standalone biofuel (E100) in flex-fuel vehicles, while anhydrous is mixed with gasoline at a proportion of 27%.
Mills boosted ethanol production rather than sugar this season due to fast liquidity in the domestic market and lower sugar prices.
Domestic prices have increased because of the 6% increase in ex-refinery gasoline prices announced in late September combined with fewer hydrous ethanol offers in the spot market, as many producers have already ceased operations for the intercrop period.
