SAO PAULO (Dow Jones)--Brazil's ethanol consumption is rapidly growing in new states, said the Union of Sugarcane Industries, or Unica, Monday. Nine Brazilian states saw major increases in consumption of more than 100% between January and May compared to a year ago, said Unica in a press release. Unica said ethanol consumption is rising in states where ethanol was less popular than gasoline.
Mato Grosso state lead the pack, recording a 220% rise to 17.9 million liters of ethanol consumed between January and May versus 5.6 million liters in the same period in 2007. Elsewhere, ethanol consumption in Maranhao rose 193%, Espirito Santo 158%, Amazonas 144%, Rio de Janeiro 143%, Bahia 142%, Rondonia 134%, Para 130% and Tocantins 124%. Overall, Brazil's total ethanol consumption rose 54.8% to 5 billion liters between January and May.
"In recent weeks, in 92% of the Brazilian market, ethanol from the pump recorded prices 65% lower than a liter of gasoline," said Antonio de Padua Rodrigues, Unica's technical director. Brazil's northeastern region saw a big jump in consumption, with many owners of flex-fuel cars switching to ethanol, said Renato Cunha, who heads Pernambuco's sugar cane industry association.
"The higher consumption of ethanol is due to the increase in use of ethanol in flex-fuel cars," said Cunha on Monday. Unica is still reconsidering its center-south sugarcane crop estimate, currently at 489 million metric tons. A new crop estimate is to come out next month.
Rainy weather at the start of the harvest season could have the crop revised downward. Brazil is the world's second-biggest producer of ethanol and the biggest exporter. Brazilian ethanol is made from sugarcane and has the best CO2-reduction balance of any biofuel currently sold.
-By Tony Danby; Dow Jones Newswires; 55-11-6847-4523; brazil@dowjones.com
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