By Argus Media
Apr. 16, 2012, Sao Paulo, Brazil - Brazil's ethanol imports will fall to 500mn litres during the 2012-13 season from 1.5mn l last year as the country's main cane crop recovers from its worst season in a decade, according to Brazil's leading sugar and ethanol producers association Unica.
Imports during the 2011-12 harvest season, which began in April and ended in March, reached a record high, after drought and poor yields caused ethanol output to drop by nearly 20percent from the previous harvest.
Ethanol demand from Brazil's flex-fuel car fleet has grown steadily over the past several years with strong car sales and an expanding middle class.
Brazil remained a net exporter of ethanol, exporting 1.85bn litres last season, despite the increase in imports. Shipments of ethanol will fall to 1.7bn litres this season because of strong local demand, Unica estimates. Half of these exports will go to the US, according to the US Renewable Fuels Association.
The tight local fuels market in Brazil, which has prompted state-controlled Petrobras to import record amounts of gasoline because of refining shortfalls, has also led to an influx of corn-based ethanol from the US.
The strong real against the dollar also facilitated the flow of US ethanol to Brazil.
Brazil's ethanol output is forecast to grow to 21.5bn litres this season in the main centre-south crop, up from 20.5bn litres last season. The increase is a result of increased planting of sugarcane. Yields remain weak because of weather conditions and lack of investment in replanting old cane fields.