Ethanol prices in Sao Paulo inverted last week’s upward trend and began declining as the 2007 sugar cane crop starts to hit the market, putting an end to the inter-harvest period.

 
Falling prices are normal for the end of the inter-harvest period.  “Prices used to go down between 5% and 10% when the new harvest hits the market,” said Marcelo Andrade, director of Rio de Janeiro-based trading firm Ecoflex Trading.

The price for anhydrous ethanol, a gasoline additive, fell slightly from 1.071 Brazilian reals ($0.52) per liter in the week of April 1-5 to BRL1.070 in the week between April 9-13, according to the Center for Advanced Applied Economic Studies, or Cepea, which publishes local market prices each Friday.

 
The price for hydrous ethanol, a gasoline substitute, continued to fall, from its peak at BRL0.96 during the March 26-30 week, to BRL0.94 during the April 9-13 week.

Sao Paulo is Brazil’s No. 1 ethanol-producing state, accounting for roughly 60% of the country’s total ethanol production. Brazil is the world’s No. 2 ethanol producer, but No. 1 ethanol exporter.