NEW YORK, June 22 (Reuters) – The United States and Brazil, the world’s top two ethanol producers, are expected to hold down production in coming months because of the surging cost of corn and sugar. Tight corn and sugar supplies are passing through to ethanol costs, making producers reluctant to raise production, and boosting gasoline prices as well. The United States and Brazil are the linchpins of worldwide ethanol supply, accounting for 75% of global ethanol exports last year, according to S&P Global Platts Analytics. U.S. gasoline prices on average are above $3 per gallon for the first time since 2014, American Automobile Association data shows, while prices in Brazil are at 5.40 reais per liter ($4.06 per gallon) in June in Sao Paulo state, near all-time highs. Ethanol usually helps lower gasoline prices, said Scott Irwin, a professor at the University of Illinois, as it tends to be an inexpensive source of needed octane for gasoline. However, at current market prices, ethanol is actually adding to gasoline’s cost. U.S. corn futures recently reached highs not seen since 2013, while ethanol prices hit their highest level since 2014, according to Refinitiv Eikon data. U.S. ethanol production has rebounded from a… continue reading
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Source: CTRM Center