Biodiesel turns cheaper than imported diesel in Brazil amid debate over higher mix
SAO PAULO/RIO DE JANEIRO, March 9 (Reuters) – The cost of imported diesel in Brazil has surpassed the price of biodiesel, a survey showed on Monday, a rare scenario that provides additional arguments for farm lobbies backing a proposed hike in the mandatory mix of the biofuel in the fossil fuel.
A spike in diesel prices is emerging as the most immediate threat to Brazil’s farm sector from the U.S.-Israeli attacks on Iran, raising costs for producers harvesting a record soybean crop amid an imbalance between domestic and external fuel prices.
Biodiesel in Brazil was quoted at an average of 5.4881 reais ($1.06) per liter on Monday, versus 5.6740 reais ($1.10) per liter for imported diesel, according to a survey from consultancy firm Raion Consultoria shared with Reuters.
Eduardo Oliveira de Melo, managing partner at Raion Consultoria, adding the decision is usually political, said:
From a technical standpoint, there is room for increasing the mix, but to do that, you have to convince the government,
Agriculture lobby CNA has requested the government to “urgently” increase the mandatory biodiesel mix in diesel to 17% from the current 15% to mitigate the impact of rising oil prices in the diesel market. The mix is set to rise to 16% later this year, according to an official schedule.
The head of fuel imports lobby Abicom, Sergio Araujo, said now is not the time to increase the mix. He added that, when including costs such as logistics expenses, the move would trigger higher diesel prices to final customers.
Abicom, together with fuel distributors and gas station lobbies, backs a different proposal, seeking the government to allow biodiesel imports, which are currently banned, to a limit of up to 20% of Brazil’s demand.
($1 = 5.1651 reais)
Reporting by Roberto Samora in Sao Paulo and Marta Nogueira in Rio de Janeiro; additional reporting by Leticia Fuchuchima in Sao Paulo; Editing by Stephen Coates
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Biodiesel turns cheaper than imported diesel in Brazil amid debate over higher mix, source
