Brazil to increase ethanol production for exports
U.S. demand continues to spiral
By Paul Teague, Editor in Chief -- Purchasing, 9/21/2006 1:46:00 PM
With increased demand for ethanol coming from many global markets, Brazil is aggressively expanding the number of sugarcane plantations in the country and expects to more than double its annual exports of ethanol by 2010, according to Silas Rondeau, mines and energy minister.
The expansion of Brazil’s sugarcane growth will increase production of ethanol to 6.87 billion gallons annually in 2010 up from the current production of around 4.23 billion gallons annually. Brazil is already the world’s top exporter of ethanol and produces about as much ethanol as the U.S. In 2005, Brazil produced 4.22 billion gallons, slightly less than the 4.26 billion gallons the U.S. produced. China, the world’s third-biggest producer in 2005, had 1 billion gallons.
Brazil's state-run oil firm Petroleo Brasileiro, or Petrobras, says the majority of export demand is coming from Japan. But Paulo Roberto Costa, refining chief at Petrobras, recently said, “Japan isn't alone in its interest in increasing ethanol imports. There's the U.S. and other countries in Asia that want to increase their use.”
In 2005, Brazil exported roughly 20 million gallons to the U.S. The U.S. only imported about 3% of its ethanol in 2005, but according to the U.S. International Trade Association, through the first six months of 2006 the U.S. demand for ethanol is outpacing domestic production, despite new plants coming online. Demand is averaging 313,000 barrels/day in 2006, while production is currently averaging 299,000 barrels/day.
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