Brazil ethanol oversupply possible – Unica

11 September 2007 00:09  [Source: ICIS news]

HOUSTON (ICIS news)--Brazil’s surging ethanol production could lead to an oversupply of the biofuel by 2009, but the industry could remedy the situation by harvesting less sugarcane, industry association Unica said on Monday.

“While it is not always easy to predict what will happen to an agricultural commodity, such as sugarcane, it is possible that Brazil could end up more sugarcane than it will need,” said Unica consultant Alfred Szwarc on the sidelines of a biofuels conference in Houston.

Ethanol producers could address the problem by leaving some sugarcane unharvested on the field until the following harvest, as that would not significantly impact the quality of the feedstock, the consultant said.

In 2006, Brazil harvested 426m tonnes of sugarcane, 87% of which was planted in the centre-south region of the country. Unica expects sugarcane production in the centre-south to grow by 10% in 2007.

Szwarc further said that increased ethanol exports by Brazil in the next two years could also help ease the pressure on the supply side. Among the prospective new markets is Japan, which could import up to 400m litres/year of the Brazilian biofuel, he said.

Szwarc also touted the growing use of sugarcane ethanol as a feedstock for ethylene production, in a reference to projects under development by petrochemical companies Braskem and Dow Chemical.

Both Dow and Braskem have announced plans to produce polyethylene (PE) in Brazil, using the biofuel as a feedstock.
By: William Lemos
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