Latam Agribusiness: Temporary E32 provides limited relief to ethanol oversupply

研报英文原文证据摘录

Latam Agribusiness: Temporary E32 provides limited relief to ethanol oversupply

Accessible version

Latam Agribusiness

Temporary E32 provides limited relief to

ethanol oversupply

Industry Overview

CNPE approves temporary increase in ethanol blend 14 July 2026

Brazil’s National Energy Policy Council (CNPE) approved a temporary increase in the

Equitymandatory blend of anhydrous ethanol in gasoline from 30% to 32%. The E32 mandate

Latin Americawill initially remain in effect for 180 days and may be extended once for an additional

Food-Commodities180 days. No decision has yet been made to permanently increase the blend after the

second potential extension expires. According to the government, the measure is Isabella Simonato >>

intended to reduce Brazil’s exposure to volatility in international oil markets and could ResearchMerrill LynchAnalyst(Brazil)

lower gasoline import requirements by approximately 500mn liters per month. The +55 11 2188 4243

previous increase, from 27.5% to 30%, took effect in June 2025. isabella.simonato@bofa.com

Julia Zaniolo >>

E32 should add 1bn liters by year of ethanol demand ResearchMerrill LynchAnalyst(Brazil)

The higher blend should add around 1bn liters per year to domestic demand for +55 11 2188 4367

julia.zaniolo@bofa.com

anhydrous ethanol. While positive at the margin, we do not expect the measure to

Fernando Olvera >>

provide meaningful support to ethanol prices, as the incremental demand should be Research Analyst

more than offset by the strong increase in supply. We expect corn ethanol production to Merrill Lynch (Mexico)

+52 55 5201 3473

grow 25% YoY to 11.5bn liters in the 2026/27 crop year, while the more ethanol- folvera@bofa.com

oriented sugarcane mix should also increase cane-based ethanol availability. We