Brazil Sugar and Ethanol Makers Claim They’re Doing Everything Right

    Sugar plant in Brazil

    Sugar plant in BrazilIn Brazil, UNICA, the ethanol/sugar mill owners trade union, says 2009 was a terrible year for them.  Tell that to car owners facing ethanol prices at more than 80% the price of gasoline in most of the country. Brazilian ethanol, made from sugarcane, is uneconomical when it is more than 70% the price of gasoline.

    “Even so, there is no risk of negative effects on ethanol production because of high sugar prices on international markets,” says Antonio de Padua Rodrigues, the Technical Director at UNICA.

    Translation: Mr Rodrigues claims that mill owners are not making sugar instead of ethanol and are not selling sugar on international markets where the price is the highest in 30 years instead of selling ethanol on the Brazilian domestic market.

    In short, the mill owners ain’t misbehavin’. And they have a lot to say about other negative effects on ethanol production, but not much about the negative effects of ethanol prices at the gas pump.

    In 2009 expectations were that producers would crush 580 million tons of sugarcane but only 530 million tons made it to the mills. And there was the additional problem of lower yields due to high levels of humidity in the sugarcane, which reduces saccharification – the production of sugars in plants. Rodrigues says the loss was some 10 kilos of sucrose per ton of sugarcane.

    Rodrigues gets dramatic as he describes 2009. “It was tragic. Lots of negatives for our sector. The international financial crisis dried up credit and producers had no money just when they needed it desperately for cash flow.

    “The only way to sustain cash flow was by selling our produce and that pushed prices way down between April and September. Then the harvest was hit hard by too much rain – the highest levels of rainfall in 30 years – and just as demand rose supply dropped. Result: prices exploded in November.”

    UNICA admits that the price of ethanol at the gas pump in January 2010 was 110% higher than it was in April 2009! Even so, they promise that 57% of sugarcane production in Brazil will continue to be crushed for ethanol. 

    As for 2010, Rodrigues says that with credit available on the market now and changes in ethanol commercialization processes being implanted, including a futures market, there are good business opportunities for everybody in the sector.

    It is not quite clear, however, what good opportunities will be available for the drivers of Brazilian-made flexfuel cars in 2010.



    • Show Comments (1)

    • Michael

      Brazil Sugar and Ethanol Makers Claim They’re Doing Everything Right
      a bit simplistic, little understanding of supply & demand, anhydrous vs hydrous, older versatile plants vs new layout etc

    Your email address will not be published. Required fields are marked *

    comment *

    • name *

    • email *

    • website *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.


    You May Also Like

    Assembly line in Brazil

    Brazilian Companies Invest 7.4% of Their Net Revenues

    Brazilian companies invested 7.4% of their net revenues in the first quarter of this ...

    Downtown São Paulo

    Study Shows Brazil Growing at Least 3% for Next 5 Years Despite World Jitters

    A study by the Economic Commission for Latin America and the Caribbean (Eclac) shows ...

    José Alencar

    Brazil’s Ex Vice President, Self-Made Millionaire José Alencar, Dies at 79

    Brazil’s former vice president, José Alencar, died in the Sírio-Libanês Hospital in São Paulo ...

    The Poet and the Moon

    Ugly and diminutive, Catullo da Paixão Cearense was a giant of Brazilian music during ...

    Cover of book on Obama

    Obama’s Trip to South America Pleases Brazil and Upsets Argentina

    American president Barack Obama has announced that he will pay his first visit to ...

    IMF Values Private Investment in Brazil

    The Director of the Fiscal Affairs Department of the Monetary International Fund (IMF), Teresa ...

    Brazil and Latin America, a US$ 74 Billion Regional Trade Power

    Trade among the Latinamerican Integration Association (ALADI) members, which include Brazil, Mexico, Argentina and ...

    Bioenergy abengoa

    Brazil Lays Out US$ 35 Million for a Bioenergy Disneyland

    Biofuels and oil. These are the main topics of the visit of Russian president ...

    Malaria and Malnutrition Plague Brazilian Indians

    Infant mortality among Brazilian Indians has fallen 17% since the beginning of the year, ...

    Quiet Riot

    I imagined the stories I could tell when I got back to Europe, about ...