After successive records in domestic sales of hydrated ethanol (used directly in vehicle tanks), there were doubts in the market about whether the production of the 2019/20 harvest, even a record, would be enough to guarantee supply in this off-season. Since January, however, "new" offers, in addition to the volumes already produced at the sugarcane mills, remove this risk.

Plants that process corn ethanol made 177.8 million liters of biofuel from cereal in January. In addition, 177.7 million liters of ethanol (also corn, from the United States) were imported in the month, compared to 153 million in January last year, according to data from the Union of Sugarcane Industries (Unica).

Together, these volumes are equivalent to more than all the consumption of hydrated ethanol in Minas Gerais in December, of 304 million liters, according to the National Agency of Petroleum, Natural Gas and Biofuels (ANP). The mining market is the second largest in the country, behind São Paulo, where sales of biofuel have surpassed 1 billion liters per month.

It is true that this "extra" offer in January is still relatively small compared to the volume in inventories at the beginning of the month. On December 31, the physical stock in the country's plants was 8.4 billion liters, of which 5.2 billion were hydrated, according to a survey conducted by the Ministry of Agriculture.

If the pace of hydrous sales in this off-season repeated the average of the previous months, of around 1.9 billion liters, some analysts estimate that in fact there could be a strong tightening in the offer. But sales in the Center-South region in January posed a question in the equation. The sale of hydrate in the month decreased 4.3% compared to January 2019, to 1.752 billion liters, while the anhydrous yield decreased 6.3%, to 735.5 million.

In a note, Unica was cautious about the significance of these variations. The entity considered that "it is necessary to assess the movement of stock in the distribution link or even of other traders along the ethanol chain" and that the real movement of consumption will only be verified in the ANP data on January sales, which will be released on the 28th.

Martinho Ono, a partner at SCA Trading, said that some reduction in demand for ethanol is already foreseen at this time, especially when the price of gasoline at the pumps begins to reflect the reductions promoted by Petrobras at refineries.