(Photo: Hugo Rossi, chairman of the largest sugarcane-based ethanol producer, said that ethanol prices go down when gasoline ones go up)
The sugarcane-based ethanol industry feels disappointed by President Macri’s Administration. As we have been saying in our RIA Consultores’ weekly reports, the National Government has liquefied the ethanol price in dollar through the last years.
Until 2015, the official price for the ethanol (for the mandatory blend) rounded one dollar per liter. Now, the sugar cane ethanol price was fixed at AR$22.73 or US$0,50, i.e. a half that four years ago.
Last week, the Argentine Sugar Center, a centenary institution that joint the sugar cane industry, manifested its concern about the critical situation of the ethanol industry. They say that price is belated, and that for this reason, the sugar industry is transferring to oil companies (which blend the ethanol with gasoline) AR$2,400 million per year or US$52 million.
“While gasoline rose 86% from October 2017, ethanol price just rose 34%. This is unacceptable”, the spokesperson from the CAA said.
Hugo Rossi, chairman of one of the largest sugarcane-based ethanol producer, Seabord Co., criticized the Government in the start of a new sugar harvest season, saying that the Government is changing the rules of the game with which the investments were made. “They reduce the ethanol prices when at the same the oil prices are climbing”, he said.
In 2018, the ethanol industry produced 1.13 million cubic meters, 53% of them from the corn-based industry and the remaining 47% from the sugarcane-based industry. The 26.093 Act established a mandatory blend between ethanol and gasoline, a blend that is currently has been fixed at 12 percent.
Alconoa (former name of Seaboard Co.) is the largest sugarcane-based ethanol producer with 133K cubic meters in 2018; the second place was occupied by La Florida SA with 111K cubic meters. But largest ethanol producers are two corn-based companies, Promaíz and ACABio, which produced 168K m3 each one, last year.