Ethanol ’07: Cellulosic to lower US corn prices

21 February 2007 19:37  [Source: ICIS news]

TUCSON, Arizona (ICIS news)--US corn prices will retreat from the 2006 peaks as cellulosic ethanol becomes commercially viable in the coming years, LECG consultant John Urbanchuk said on Wednesday.

US corn prices jumped by 60% to more than $4.00/bushel between September and January, with the increase being attributed in part to greater corn demand for ethanol production.

Urbanchuk did not make a projection on the price of corn, but he said ethanol would consume about 30% of the US corn crop by 2012.

That compares with 17% last year, according to data from the Renewable Fuels Association (RFA).

Corn demand will slowly subside as large-scale cellulosic production becomes available after 2012, Urbanchuk told the National Ethanol Conference in Tucson, Arizona.

LECG is based in Emeryville, California.

Cellulosic biomass is expected to play a major role in helping the US meet its 35bn-gal ethanol production target set for 2017.

However, US corn supplies should be enough to produce only about 20bn gal of ethanol in that period, without impacting other markets, one analyst said.

The National Ethanol Conference, which is sponsored by the RFA, ends on Wednesday.
By: William Lemos
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