Ethanol will save the day: Brazil's Ethanol Exports May Gain From U.S. Floods, Unica Says
Record corn prices caused by U.S. flooding may open a ``larger window of opportunity'' for Brazil to ship more sugar-based ethanol to the U.S., Brazil's Unica sugar association said.
Corn priced at $6 a bushel or more makes it unprofitable for use in fuel production, said Geraldine Kutas, international adviser to Sao Paulo-based Unica. The grain has climbed 30 percent this month and reached a record $7.915 on June 16.
``The logic tells you this should be a larger window of opportunity'' for Brazilian ethanol producers, Kutas said in an interview at an F.O. Licht sugar conference in Brussels today.
Brazil's central and southern sugar-growing areas will use 58 percent of cane production for ethanol in the year ended September 2009, up from 52 percent this year, she said.
Total ethanol shipments from Brazil may rise to as much as 4.5 billion liters (1.19 billion gallons) this year, boosted by U.S. demand, from 3.2 billion liters last year, Unica President Marcos Jank said last month.
Shipments directly to the U.S. last year were 850 million liters, Kutas said. The U.S. imposes a 54-cents-a-gallon tariff on imports of biofuels, including sugar-based ethanol from Brazil. Brazil also ships ethanol to the U.S. through Jamaica and neighboring Caribbean countries.
To contact the reporter on this story: Claudia Carpenter in Brussels at ccarpenter2@bloomberg.net. |
