BRAZIL: Producers want ethanol boost

By just-auto.com editorial team | 30 August 2006

The Brazilian government will consider a request from the sugar and ethanol industry to raise the ethanol blend in petrol from 20%, the agriculture ministry said.

"We must wait for the studies and analyse them," agriculture minister Luis Carlos Guedes Pinto told Reuters after industry leaders met President Luiz Inacio Lula da Silva in Sao Paulo.

During the past five weeks, ethanol prices have fallen to the lowest level since September 2005, prompting producers to seek an increase in the blend, the report noted.

Under Brazilian law, the maximum blend of anhydrous alcohol, a type of ethanol, is 25%. Such a move would raise consumption by 100 million litres a month.

In February, the government reduced the blend to 20%, from 25%, after ethanol prices rose above an agreed limit due to strong demand from flex-fuel motorists and lack of supply during the centre-south inter-harvest season, Reuters said.