Exports of ethanol in the US and Brazil are on the rise as consumers look to increase fuel supplies
As the Strait of Hormuz Crisis continues, several countries are looking to increase their fuel sources. This will lead to a surge in the exports of the biofuel.
Representatives from the biofuels industry said this week that the U.S. has seen a 20% increase in ethanol exports this year compared to last year's record-breaking shipments. Brazil, meanwhile, could see its sales abroad more than double in the upcoming trading season of 2026/27, which began in April.
It would benefit corn growers, processors, and millers in Brazil as well as the U.S. as it would increase production, boost demand, and support prices in those markets. The two countries would have a chance to revive an old plan to create a global market for ethanol that was discussed by U.S. President George W. Bush in 2007 and Brazilian President Luiz nacio Lula da il during the American president's state visit to Brazil.
U.S. ethanol?group RFA reports exports of 638 millions gallons for the first quarter were 20% higher than last year.
Brazil's Datagro consultancy estimated that ethanol exports would reach 2.2 billion (581.1 million) liters (581,1 million gallons), up from 1 billion in the previous season.
Geoff Cooper is the chief executive of RFA. He said that countries all over the world are trying to find any liquid fuel source they can. U.S. prices for ethanol are competitive with gasoline.
Plinio Nastari, Datagro’s chief analyst, said that several countries, especially in Asia, have increased the ethanol blend rate in gasoline.
He said that some of the countries have a small amount of?ethanol production but will still need to import a portion of it.
Energy security is the reason why renewable energy producers believe that even if Iran and the U.S. reach a deal to reopen Hormuz soon, there will still be a higher demand for energy. Many countries want to reduce their dependency on a single large source of energy, such as the Middle East where tensions are likely to continue even if a deal is reached, according?Shameek konar, the head of energy for Ara Partners. This private equity firm invests in renewable energy projects, including biofuels, in the U.S.
He said that the conflict had brought energy security to the attention of all policy makers in the world during his presentation at the BMO Farm to Market Conference held in New York.
Datagro said that Brazil's ethanol production will rise by 4 billion liters to 41.4 billion liters at the start of the new season, a record.
RFA said that the U.S. is planning to increase ethanol production by 1 billion gallons in 12-18 months.
(source: Reuters)
