Saturday, April 25, 2009 6:59:21 PM
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By Carlos Caminada and Laura Price
April 22 (Bloomberg) -- Cosan SA Industria & Comercio, the world’s biggest sugar-cane processor, climbed the most in almost three weeks on speculation higher Brazilian taxes on gasoline will make its ethanol more competitive.
Cosan rose 11 percent to 12.81 reais in Sao Paulo trading, the biggest increase since April 3. The shares have gained 14 percent this year, compared with a 20 percent advance in the benchmark Bovespa index.
Brazil, the world’s biggest per-capita ethanol consumer, may charge fuel distributors higher taxes on gasoline sales, offsetting a possible price cut by state-controlled oil company Petroleo Brasileiro SA, Folha de S. Paulo reported today, without saying where it got the information. The tax increase would mean that Petrobras’s price reduction to distributors won’t make the fossil fuel cheaper for consumers.
“A tax increase on gasoline would change the picture,” Paulo Roberto Esteves, an equity analyst at Gradual Corretora in Sao Paulo, said in a telephone interview. “It means ethanol wouldn’t become less competitive.”
Cosan slumped 19 percent in the previous two sessions on expectations cheaper gasoline would pare demand for its crop- based fuel. Piracicaba, Brazil-based Cosan is the country’s biggest producer of ethanol.
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