Anhydrous ethanol produced in Center-South Brazil and transferred to supply fuel demand in the country's North-Northeast grew 65% year on year in January to nearly 135.5 million liters, but was 4% lower than the volume transferred in December, according to data from the National Petroleum Agency (ANP).
Hydrous fuel ethanol transfers amounted to nearly 28 million liters, more than double the 10.7 million liters sent in January 2015 and up 1% from December, the ANP data shows.
Anhydrous ethanol is mixed with gasoline at a proportion of 27%, while hydrous is used as a standalone biofuel in flex-fuel vehicles.
The North-Northeast region is a net importer of anhydrous and hydrous. It is expected to meet roughly 42% of local anhydrous demand and roughly 70% of local hydrous demand from its own production in 2015, according to Platts agricultural analytics unit Kingsman.
The Center-South region transferred 438 million liters of hydrous fuel and 1.42 billion liters of anhydrous fuel to the North-Northeast in 2015, ANP data shows.
Kingsman estimates that total hydrous and anhydrous transfers (for fuel and industrial use) from Center-South have grown from roughly 178 million liters in 2007, when they started, to almost 2 billion liters in 2015.
The increase in transfers is because the region's ethanol production has not increased at the same pace as consumption. In 2007, hydrous and anhydrous production in the North-Northeast totaled 1.95 billion liters, rising to a record of 2.4 billion liters in 2015, according to data from the agriculture ministry.
Total hydrous and anhydrous consumption (fuel and industrial use) has risen from 2.1 billion liters in 2007 to 4.8 billion liters in 2015, according to Kingsman.
The US has been also a supplier of anhydrous ethanol to the North-Northeast since 2011, with US imports at nearly 450 million liters that year. In 2015 imports from the US totaled 426 million liters, up 24% year on year, data from the secretariat of foreign trade shows.
In the first two months of 2016 imports from the US totaled 61.7 million liters, down 41% year on year.
Kingsman estimates that imports from the US will reach 400 million liters this year.