According to the Retail Fuel Merchants’ Syndicate (Sindicomb), the problems that the Brazilian federal government has been facing in trying to deal with successive increases in the price of alcohol and the possibility of short supplies arise from the lack of a regulatory reserve in Brazil.

    In an interview with the Agência Brasil, the president of the association, José Luiz Mota Afonso, regretted the fact that, once again, the final consumer will end up being the loser.

    "The big problem is the regulatory reserve. Alcohol is an agricultural product, like soybeans. And we don’t have any problem with soybeans in the inter-harvest period, because in this case the government maintains regulatory reserves, so the price doesn’t vary.

    "Since the government hasn’t formed a regulatory reserve for alcohol, what happens is that, once again, the country falls into the hands of the sugar mill owners," the association leader explains.

    Mota Afonso accuses the mill owners, which he defines as "a group of between three and five," of dominating the sector and having no sense of responsibility toward the country.

    "Just like ten years ago, when they drove the Pro-Alcohol program into the ground. The price of sugar abroad was higher than the price of alcohol, and they preferred selling sugar.

    "They are totally devoid of a sense of responsibility toward the country. While we gas station owners see our businesses shut or receive fines, they sit around dictating rules that the government can’t do anything about," he said.

    Agência Brasil

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    • Show Comments (3)

    • Guest

      economics
      Previous poster – you understand nothing about economics. It is exactly because of high sugar prices and high world demand for ethanol that there could be domestic shortages of ethanol.
      Sugar and ethanol producers are businesses who obviously prefer to sell for the highest price. Why would they choose to keep reserves if they can export now for a high price? It is the government that wants them to keep reserves of ethanol so Brazilian car drivers can be sure of having fuel at the pumps throughout the year.

    • Guest

      And why should it always be….
      the government responsibility to maintain reserves and not the producers or the dealers with storage ???????

      Ohhhh lÀ  lÀ  lÀ  ! Brazil government alweays expect a gesture from IMF, WB, IADB, UN, or whatever and the brazilian industries always expect their government for a gesture on cheap loans through BNDES for example.

      Cant sugar and ethanol producers not invest in storage with the actual sugar price that is the highest in several decades ?
      NOOOOOOOOOOOOOOOOOO !
      VERY SAD !

    • Guest

      Does Brazil wishes high prices…..
      …only for their products they export ?
      So you should have no problem by selling at a higher price what you export and at a lower price what you produce and use internally !!!!! That is what oil producing countries do ! Just do the same with sugar and ethanol !

      Afterall the less profits the sugar and ethanol producers make, the less they can reinvest for a faster growth of production !
      And the longer the shortage will be !

      And why havent you done the same in 2003 WHEN soya price was very high ? You should have done the same as you do now with sugar and ethanol, reduce exports and reduce your own consumption to reduce farmers profits and government taxes !!!! Right ????

      Simple demonstration of how inconsistent are the brains of your government !

      In exactly 2 similar situations….they decide the opposite in one case from the other !
      And they obviously are right in both cases…when they announce their decisions !

      Great brains ! Great brains !

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