This model provides the calculations for our ethanol determinations. It calculates the market price of importing ethanol (the “import parity price” or “IPP”). It does this by:
- Calculating the nine-month average (to one month prior to the commencement of the pricing period) of weekly import parity price estimates based on the lowest cost origin for ethanol from either the US or Brazil.
- Adding port charges and fuel excise for imported ethanol that applies at the time of the determination.