April 10 (Reuters) – Brazil’s ethanol makers are ready to raise output if the government hikes the legal mix of anhydrous ethanol blended with gasoline from 30% to 32% this year, industry figures said, adding that production is heading towards a record.
Brazil’s government wants to raise the ethanol blend to 32% in the first half of the year, the country’s Minister of Mines and Energy Alexandre Silveira said this week, amid higher costs for fossil fuels as oil prices surge following conflict in Iran.
“It’s an excellent moment for this decision, because we are at the start of the harvest … mills are in the early phase of defining their production mix,” Mauricio Muruci, a sugar and ethanol analyst at consultancy Safras & Mercado, told Reuters.
A higher ethanol blend would increase the share of sugarcane processed into biofuel in Brazil. Safras & Mercado estimates the proportion of cane used to make ethanol rather than sugar would rise to 54%, one percentage point above its previous forecast following the minister’s comments, compared with 51% in the previous season, Muruci said.
With more cane allocated to ethanol and the continued strong expansion of corn‑based ethanol, total production in Brazil could reach between 44 billion and 44.5 billion liters — a record level and about 15% higher than last season, Safras & Mercado said.
Industry groups including sugarcane association Unica and corn‑ethanol group Unem said the sector is ready to increase supply under a higher blend mandate, which would require an additional 2 billion liters of ethanol.
Unica does not expect supply problems in Brazil, it said, forecasting 2026/27 ethanol production at “the highest volume ever recorded,” with growth of about 4 billion liters.
Unem echoed that assessment, saying corn‑ethanol output alone is expected to contribute 2 billion liters to the forecast expansion. The group estimates that amount alone would meet the requirements caused by hiking the mix of ethanol to gasoline to 32%.
“In other words, to meet this additional demand, half of the growth expected from the sector (corn and sugarcane) in the harvest now beginning is enough,” said Thiago Skaf, Unem’s director of government relations and sustainability.
Brazil Energy Insight 
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