The new method, based on the time barges spend when loading ethanol in Rotterdam, is “totally unacceptable” because it will raise costs, complicate corporate planning and penalize buyers who will need to rent tankers on short notice, Erik Werner, a senior trader at the Hanholmsvägen, Sweden-based company, said in an e-mailed statement.
Platts, the New York-based price-reporting agency owned by McGraw Hill Financial Inc. (MHFI), said in a July 16 presentation it may determine benchmark prices for ethanol, a biofuel derived from corn or sugar, by looking at barges that load in three separate five-day slots instead of over a 13-day period. The change would better reflect the fuel’s value by taking into account its price in more precise timeframes, according to Platts. That move was confirmed yesterday in a note on Platts’s website and will take effect Aug. 1.
“Suggested changes to the ethanol market of the European Union are beyond comprehension,” Werner said in the July 17 statement. Platts should extend the loading period it uses for assessments to a full month and prolong consultations on the changes with industry participants until December, he said at the time.
Platts, which publishes the Dated Brent benchmark that helps determine the price of more than half the world’s oil, said it “regularly engages with a broad array of market participants about the markets it covers,” Kathleen Tanzy, a New York-based spokeswoman for the company, said in an e-mailed response to questions about the proposal on July 18.
Lantmannen is Sweden’s only “large-scale” producer of grain-based ethanol for blending into fuel, according to its website.
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