A trader said the price spreads between Chicago and West Coast hubs have narrowed in recent weeks, due to competition from Brazilian low carbon ethanol that have flowed into California.
Spot ethanol prices in California were at a 13 cents premium over Nebraska prices, down from the typical 20 cents, while the Pacific Northwest spread was 10 cents, down from a traditional 18 cents spread.
He said blenders in California prefer Brazil's sugar-based ethanol because it meets the state's low carbon fuel standard. "Brazilian ethanol is displacing fuel ethanol from Nebraska in California, tightening the spreads for north California and Pacific Northwest hubs," he said.
George Orwel can be reached at firstname.lastname@example.org.
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