Ethanol x Gas X SugarSome thoughts in Supply & DemandMarcelo PierossiEconomic Issues, Food & You - Coursera 2013
Journey Entry10 - Relationship between ethanol and gasoline in Brazil reaches71.73% (In portuguese)The article below is fr...
Brazilian Sugarcane Production© Marcelo Pierossi - 2013
Brazilian Sugarcane MillsFlexible operation: Sugar and Ethanol (from 40 to 60%)© Marcelo Pierossi - 2013
Production Mix• Production defined by Prices• Sugar Prices – International Prices• Ethanol Prices – Domestic Market Gas –...
Domestic Sugar S&DAmortgui, H. - A PROSPECTIVE ANALYSIS OF BRAZILIAN BIOFUEL ECONOMY:LAND USE, INFRASTRUCTURE DEVELOPMENT ...
Sugar International MarketWorld raw sugar price, ICE Contract 110.005.0010.0015.0020.0025.0030.0035.00Dec-99 Apr-01 Sep-02...
Sugar Domestic Market© Marcelo Pierossi - 2013
Flex Fuel Engines• A flexible-fuel vehicle (FFV) or dual-fuel vehicle (colloquially calleda flex-fuel vehicle) is an alter...
Flex Fuel Cars• Evolution of the numbers of flex fuel carsin Brazil (a graph will be added)© Marcelo Pierossi - 2013
Domestic Ethanol S&DAmortgui, H. - A PROSPECTIVE ANALYSIS OF BRAZILIAN BIOFUEL ECONOMY:LAND USE, INFRASTRUCTURE DEVELOPMEN...
Ethanol Domestic Market© Marcelo Pierossi - 2013
Gas PricesSource: Financial Timeshttp://www.ft.com/cms/s/0/00d4d8ee-8603-11e2-bed4-00144feabdc0.html#ixzz2SVwhAOwa© Marcel...
Gas PricesSource: Bloomberghttp://www.bloomberg.com/news/2013-01-17/petrobras-gasoline-price-rise-undecided-on-inflation.h...
Gas International PricesSource: Petrobrashttp://www.petrobras.com.br/en/products/price-composition/© Marcelo Pierossi - 2013
Gasoline Market• Importation© Marcelo Pierossi - 2013
Petrobras Market ValueSource : Bovespa© Marcelo Pierossi - 2013
Ethanol vs Gasoline vs Corn USA0.001.002.003.004.005.006.007.008.009.00Jan-00Jul-00Jan-01Jul-01Jan-02Jul-02Jan-03Jul-03Jan...
Bankruptcy of sugar mills in Brazil© Marcelo Pierossi - 2013
Some remarks© Marcelo Pierossi - 2013
Conclusions© Marcelo Pierossi - 2013
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Ethanol x Gas X Sugar - Some thoughts in Supply & Demand

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Ethanol x Gas X Sugar - Some thoughts in Supply & Demand

  1. 1. Ethanol x Gas X SugarSome thoughts in Supply & DemandMarcelo PierossiEconomic Issues, Food & You - Coursera 2013
  2. 2. Journey Entry10 - Relationship between ethanol and gasoline in Brazil reaches71.73% (In portuguese)The article below is from an important brazilian newspaper and commentsabout the price relationship between ethanol for fueling vehicles and gasoline.In Brazil, we have the option to use both fuels, because our cars are flex fuelcars and are able to run with any mix of both fuels. But one issue important isthat the energy content from ethanol is 70% of energy content of gasoline, sothis ratio is the maximum value for using ethanol instead gasoline. Andbecause ethanol is a agribusiness product with a large seasonal content, timeof the year is other important issue in the equation: Ethanol or Gasoline?• What are the factors affecting this ratio?• This kind of relationship pushes towards market perfection?• How price is affected by supply and demand law?http://economia.estadao.com.br/noticias/economia-geral,relacao-entre-etanol-e-gasolina-em-sp-atinge-7173,148563,0.htm© Marcelo Pierossi - 2013
  3. 3. Brazilian Sugarcane Production© Marcelo Pierossi - 2013
  4. 4. Brazilian Sugarcane MillsFlexible operation: Sugar and Ethanol (from 40 to 60%)© Marcelo Pierossi - 2013
  5. 5. Production Mix• Production defined by Prices• Sugar Prices – International Prices• Ethanol Prices – Domestic Market Gas – competitor (every gas station has both) 70% of energy content compared with Gas© Marcelo Pierossi - 2013
  6. 6. Domestic Sugar S&DAmortgui, H. - A PROSPECTIVE ANALYSIS OF BRAZILIAN BIOFUEL ECONOMY:LAND USE, INFRASTRUCTURE DEVELOPMENT AND FUEL PRICING POLICIES – UIUC, 2012© Marcelo Pierossi - 2013
  7. 7. Sugar International MarketWorld raw sugar price, ICE Contract 110.005.0010.0015.0020.0025.0030.0035.00Dec-99 Apr-01 Sep-02 Jan-04 May-05 Oct-06 Feb-08 Jul-09 Nov-10 Apr-12 Aug-13 Dec-14Centsperpound© Marcelo Pierossi - 2013
  8. 8. Sugar Domestic Market© Marcelo Pierossi - 2013
  9. 9. Flex Fuel Engines• A flexible-fuel vehicle (FFV) or dual-fuel vehicle (colloquially calleda flex-fuel vehicle) is an alternative fuel vehicle with an internalcombustion engine designed to run on more thanone fuel, usually gasoline blended with either ethanol or methanolfuel, and both fuels are stored in the same common tank.• Modern flex-fuel engines are capable of burning any proportion ofthe resulting blend in the combustion chamber as fuelinjection andspark timing are adjusted automatically according to theactual blend detected by electronic sensors.© Marcelo Pierossi - 2013
  10. 10. Flex Fuel Cars• Evolution of the numbers of flex fuel carsin Brazil (a graph will be added)© Marcelo Pierossi - 2013
  11. 11. Domestic Ethanol S&DAmortgui, H. - A PROSPECTIVE ANALYSIS OF BRAZILIAN BIOFUEL ECONOMY:LAND USE, INFRASTRUCTURE DEVELOPMENT AND FUEL PRICING POLICIES – UIUC, 2012© Marcelo Pierossi - 2013
  12. 12. Ethanol Domestic Market© Marcelo Pierossi - 2013
  13. 13. Gas PricesSource: Financial Timeshttp://www.ft.com/cms/s/0/00d4d8ee-8603-11e2-bed4-00144feabdc0.html#ixzz2SVwhAOwa© Marcelo Pierossi - 2013
  14. 14. Gas PricesSource: Bloomberghttp://www.bloomberg.com/news/2013-01-17/petrobras-gasoline-price-rise-undecided-on-inflation.html© Marcelo Pierossi - 2013
  15. 15. Gas International PricesSource: Petrobrashttp://www.petrobras.com.br/en/products/price-composition/© Marcelo Pierossi - 2013
  16. 16. Gasoline Market• Importation© Marcelo Pierossi - 2013
  17. 17. Petrobras Market ValueSource : Bovespa© Marcelo Pierossi - 2013
  18. 18. Ethanol vs Gasoline vs Corn USA0.001.002.003.004.005.006.007.008.009.00Jan-00Jul-00Jan-01Jul-01Jan-02Jul-02Jan-03Jul-03Jan-04Jul-04Jan-05Jul-05Jan-06Jul-06Jan-07Jul-07Jan-08Jul-08Jan-09Jul-09Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Corn $ / bu.Ethanol $ / gal.Gasoline $ / gal.© Marcelo Pierossi - 2013
  19. 19. Bankruptcy of sugar mills in Brazil© Marcelo Pierossi - 2013
  20. 20. Some remarks© Marcelo Pierossi - 2013
  21. 21. Conclusions© Marcelo Pierossi - 2013

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