Brazil plans $35bn programme to grow more sugarcane for ethanol

24 February 2012 23:55  [Source: ICIS news]

HOUSTON (ICIS)--The Brazilian agricultural ministry plans to spend billions of dollars in 2012-2015 to increase the nation's sugarcane crop so it can meet rising demand for ethanol, it said on Friday.

Altogether, the plan is worth reais (R) 60.5bn ($35.4bn, 26.6bn).

Another part of the programme would create a stockpile to even out price fluctuations for ethanol.

The multi-part plan should allow Brazil to make enough anhydrous ethanol to blend into gasoline at a rate of 25%, according to the Ministerio da Agricultura. In addition, Brazil should produce enough hydrous ethanol to supply 50-55% of the nation's light-vehicle fleet.

One measure will improve productivity of 6.5m hectares (ha) of sugarcane at a cost of R29bn, the ministry said.

Another part of the plan will produce enough sugarcane to allow existing mills to increase utilisation rates, the ministry said. This measure will require investments of R8.5bn in 1.4m ha.

The third part of the plan will grow more sugarcane so the country can meet higher demand for ethanol, the ministry said. To meet that increase in ethanol demand, Brazil will need to invest R23bn in 3.8m ha.

Together, the three measures total R60.5bn.

Another measure will begin stockpiling ethanol so the nation can provide a steady supply of ethanol throughout the year. This programme will cost R4.5bn/year.

The ministry announced the plan after Brazil had to import ethanol in 2011.

($1 = R1.71)
($1 = €0.75)


By: Al Greenwood
+1 713 525 2645



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