Brazil’s Corn-Based Ethanol Industry Booms
(Bloomberg/Hellenic Shipping News) The processing plants peppering the agricultural heartland of Brazil attest to the country’s position as the world’s biggest sugar-cane producer and the undisputed king of ethanol made from the crop. But debt has crippled the industry, paving the way for another biofuel to flourish.
Brazil’s production of corn-based ethanol is set to exceed the 1-billion liter mark for the first time ever this season, according to INTL FCstone. While that’s still just a small fraction of the South American nation’s 31-billion liter biofuel market, output is on track to expand quickly in the next few years amid an investment spree with more than a dozen new plants being planned.
The drive into corn comes after farmers tripled output of the grain in Brazil’s Central-West savannas over the past decade. That’s providing agricultural processors including Cargill Inc. with abundant supplies of the ethanol-making ingredient at a time when prices for fossil fuels in Brazil have jumped to multi-year highs.
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Average ethanol prices in Brazil have fallen 9% this year to their lowest since October, according to the National Oil Agency. In contrast, gasoline prices have gained 8.3%.
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Corn-based ethanol will likely be primarily shipped to Brazil’s center and northern states, typical destinations for U.S. exports, Tomczyk said. Brazil imported 1.7 billion liters of U.S. ethanol in the 2017-2018 season.
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Other projects, including a Cargill-backed plant in Goias state, can process both corn and cane into ethanol in so-called flex mills. READ MORE
Brazil’s BRF sees rising competition for corn from ethanol makers (Reuters)
UPDATE 1-Brazil’s BRF sees rising competition for corn from ethanol makers (Reuters)