Brazilian ethanol exports to increase 15 percent in 2008, to 1.06B gallons, analysts say

March 6, 2008

In Brazil, analyst F.O. Licht projected that Brazilian ethanol exports will increase 15 percent in 2008 to 1.06 billion gallons. The company said that sugarcane production costs have decreased 4 percent while competing feedstock costs, such as corn or wheat, have risen more than 40 percent, creating favorable competitive conditions. The 16 percent rise in gasoline prices would prompt increased exports to Europe.

Petrobras has set an export target of 1.2 billion gallons for 2012, including both first- and second-generation ethanol. The company linked this export target to its plans for an ethanol pipeline connecting both Goias and Minas Gerais states with Sao Paulo state.

November ethanol exports from Brazil were down 40 percent from 2006, falling from 132 million gallons to 80 million. The fall in US demand, resulting from a production glut in the United States, caused the fall, and resulted in more than 63 percent of shipments to go to Europe.

Recently, the head of energy development for Petrobras blamed EU and US tariffs for a massive shortfall in planned ethanol exports, and said that the effort by Brazilian President Luiz InÃ¡cio Lula da Silva to lower the trade barriers has not produced results.

20 percent of shipments were headed for the US or to Caribbean ports where it is typically re-exported. 83 percent of northbound shipments went to Caribbean ports, where it can be re-exported tax free to the US.

Petrobras has stated its plans to invest $1.5 billion in biofuel projects between now and 2012.

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Written by Jim Lane · Filed Under International, Producer News