Brazil to Raise Ethanol Mixed With Gasoline to 25% (Update1)

By Katia Cortes

April 29 (Bloomberg) -- Brazil plans to boost the amount of ethanol mixed into gasoline at the pump ahead of a record sugar- cane crop this year.

The measure to boost the ethanol mix to 25 percent from 20 percent will take effect on May 2, said Manoel Bertone, the Agriculture Ministry’s production and bio-energy secretary. In February, the government reduced the mix after inventories fell near the end of the sugar-cane harvest.

The government may lend 2.5 billion reais ($1.5 billion) to help ethanol mills stockpile the cane-based biofuel in a bid to guarantee supplies and prevent price rises between harvests, Bertone told reporters today in Brasilia. Domestic ethanol prices rose to a record 1.17 reais a liter in January, before plunging 41 percent to 83 centavos in March, according to Sao Paulo University’s school of agriculture, known as Esalq.

“Brazil won’t have problems with ethanol supply this year,” Bertone said. “We’ll have a huge crop and government policies to help mills supply the market regularly.”

The financing for stockpiles is being considered by the Finance Ministry and may be available starting in June, he said.

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