Investments in Brazil ethanol sector to remain slow in 2012

27 March 2012 16:33  [Source: ICIS news]

SAO PAULO (ICIS)--Investments in Brazil’s ethanol sector will remain slow in 2012, an industry official said on Tuesday, predicting the sector will continue to suffer the effects of a slowdown that began with the 2008 financial crisis.

Only three or four new sugarcane mills will start up production in 2012, said Luiz Antonio Dias Paes, general manager at Brazil’s Sugarcane Technology Centre (CTC).

That compares with as many as 30 new sugarcane mills being started each year not long ago, he said.

The lack of new investments will likely keep Brazilian ethanol production mostly steady in 2012, but a broker also cited fears that output could drop again this year because of the potential impact from recent dry weather in the key centre-south region.

The dry weather and frost had a 3% impact on sugarcane production in 2011, Paes said.

The centre-south produced 492m tonnes of sugarcane in April-December 2011, down from 555m tonnes a year earlier, according to data from Unica, a Brazilian sugarcane industry group.

The area accounts for around 90% of Brazil’s ethanol production.

Paes said the drop was also caused by lower yields because of a lack of investment in the replanting of some sugarcane fields.

He spoke at FO Licht’s 8th annual Sugar and Ethanol Brazil conference.

The two-day event began on Tuesday. The conference was organised in partnership with IBC Brasil.

By: William Lemos
+1 713 525 2653

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