In Brazil the consumption of cane ethanol has declined by a whopping -21% year on year (Oct 12/Oct 11, ten months cumulated), while gasoline sales have leapt by +12.1% over the same period, according to Sindicom (Sindicato Nacional das Empresas Distribuidoras de Combustíveis e Lubrificantes, an industry association). Brazilian consumers have long been used to compare prices with perceived fuel efficiency (in other words, drivers estimate the number km/lt for both gasoline and ethanol in flex vehicles), and apparently ethanol is the loser this year (again). This shows that demand - even for clean fuels - can be quickly destroyed as a result of the price level vis a vis the reference product, gasoline.
In fact the key brake is government interference with pump prices, which destroys motivation by distillers to supply the market when sugar prices are high, and remove the need to invest in capacity expansion. Another brake is inefficient & costly inland logistics, which again is the result of years of inefficient management and misallocation of funds by a bloated administration.
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