With the increased number of plants in operation at the end of March, the price of hydrous ethanol in the state of São Paulo, Brazil, fell sharply, the Centre for Advanced Applied Economics (CEPEA) in Sao Paulo said on Tuesday.

Prices for Brazil hydrous ethanol for 28 March – 1 April reached an average of Brazilian reais (R)1.655/litre ($1.71/gal), a drop of 10.1% compared with the previous week.

Similarly, anhydrous ethanol prices fell by 2.5% to R2.007/litre ($2.07/gal), CEPEA said.

Taxes are not included in the figures.

Business activity was limited, because the distributors had supplied their stocks until March 31 to meet ANP Resolution 67, according to researchers from CEPEA.

More anhydrous ethanol is in supply than hydrous to meet resolution 67 of the National Petroleum Agency (ANP), which requires fuel distributors to choose mainly by supply contracts over direct purchase regime and to have product stocked.

The sugarcane harvest in the centre-south, which accounts for 90% of Brazil's ethanol production, runs from April to November/December.

Brazil also produces ethanol in the northeast region of the country. The sugarcane harvest in that area runs from September to March.