Brazil ethanol values fell almost 5 per cent last week, the largest weekly drop so far this year, as more mills joined the early start to the 2016-17 center-south cane crop, think-tank Cepea/Esalq said.

Hydrous ethanol index for Sao Paulo state, Brazil’s largest fuels market, fell 4.7 per cent last week compared to the week before to 1.842 real per liter ($1.92 per gallon).

Cepea said in a report that fuels distributors are refraining from buying large ethanol volumes in the market, securing only enough supplies for a few days, since they expect prices to fall further as more cane is processed.

Brazil’s cane industry group Unica expects some 120 mills out of almost 300 in the center-south to be crushing by the end of March, compared to 75 mills earlier in the month.

The new crop is expected to be record at around 620 million tonnes of cane, versus 605 million in 2015-16.