The threat of Covid-19 has impacted the ethanol industry in Brazil to such a extend that it will be difficult to recover soon.
Brazilian sugarcane industry association UNICA has requested the government to take steps to prevent collapsing of sugar and Ethanol industry.
UNICA has issued a statement stating that the Covid-19 has impacted on the sale of ethanol. It is being sold at less than its production cost. This has affected the entire supply chain from sugar production to ethanol production. Around 2.30 million people are directly or indirectly associated with this sector comprising 370 mills and distilleries. 70,000 cane suppliers will be also affected due to this.
Recently, Agriculture Minister Tereza Cristina Dias had stated, “Falling demand and drop on gasoline prices has affected the ethanol sector in Brazil. To help the sector to survive the government is likely to announce some help for the sector.”
Following the sharp decline in the prices of crude oil, the ethanol producers in Brazil are mulling to reduce ethanol production and diverting more cane for sugar production.