The World Market For Ethanol You Did Not Know About.

Brazil, Business News/Analysis, Canada, Iowa, Mexico, Opinions

April 5, 2011

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by Stu Ellis (FarmGateBlog.com) …(E)thanol producers who have a pipeline into the export market may find added demand from a variety of nations that need to buy it. At a time when ethanol imports are controversial along with the import tariff to protect domestically refined ethanol, it has built a considerable foreign demand.
…The availability of an export market certainly removes the pressure applied by the “blending wall” which limited ethanol to 10% and 15% of the domestic motor fuel supply. The 10% limit was reached in 2010 as refiners were producing 14 billion gallons to meet the 10% limit of the 140 billion gallon motor fuel market in the US. The EPA has been opening up the limit to newer vehicles in a stair step schedule.
However, refiners have an export outlet if they are producing more ethanol than the domestic market can consume, and surprisingly, over the years Brazil has been a significant market despite the fact Brazil has wanted to export ethanol into the US.
…Sugar is a major crop in Brazil, and if sugar prices are high, Brazil will sell sugar to the world market, and will not have enough sugar to refine into ethanol. When sugar prices are low, sugar is converted to ethanol and it does not need to import any from the US. READ MORE and MORE (AgMRC Renewable Energy & Climate Change Newsletter)

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