Brazil Reduces Ethanol Mandate

In an effort to curb surging ethanol prices the Brazilian government have temporarily reduced the maximum amount of the biofuel allowed in gasoline from 25% to 20%. The reduction will run from Feb 1st until April 30th.

Ethanol is in short supply in Brazil after processors there switched to producing more sugar (and less ethanol) following the recent surge in prices of the sweetener. In addition the heavy rains that disrupted the harvest in Brazil in late 2009, also reduced the sucrose content of the cane.