IFA ’07: US biofuels sector looks bright - Mosaic
21 May 2007 11:52 [Source: ICIS news]
ISTANBUL (ICIS news)--Prospects for corn producers supplying the US biofuels sector continue to look bright, despite concerns over government subsidies and the food versus fuel debate, said a senior official from fertilizer company Mosaic on Monday.
Mike Rahm, vice president of Mosaic's market analysis and strategic planning, told the IFA conference that the $0.51/gallon subsidy given to ethanol producers was likely to increase, not fall, due to irreversible political will in the US.
He acknowledged that much of the argument for ethanol subsidisation was political, but added that less dependence on imported oil, security of energy supply and greater emphasis on combatting climate change through use of renewable energy sources were all “pretty powerful political arguments”.
Rahm said there were currently 119 ethanol plants operational in the US, producing around 6.1bn gallons. A further 78 plants were under construction which would effectively add a further 6.4bn gallons of production by the end of 2008.
The amount of corn used for ethanol production was also scheduled to rise by 1bn bushels by 2007-08 to reach 3.4bn bushels.
Rahm said he did not think that increased corn acreage for ethanol production would hinder food output.
“The corn sector can support a 15bn-20bn gallon/year ethanol industry,” he said.
He added that this would also lead to a higher and more stable demand for fertilizer nutrients.
The International Fertilizer Association annual meeting takes place on 21-23 May 2007 in Istanbul, Turkey.
By: Mike Nash
+44 20 8652 3214
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