Japan Might Import 6 Billion Liters of Ethanol a Year from Brazil

Petrobras, Brazil’s state-run oil giant, reports it is studying the possibility of exporting sugarcane-based ethanol to Japan. A joint venture company, Brazil-Japan Ethanol, would be set up for that.

"Japan could import from 1.8 billion liters to 6 billion liters of ethanol, depending on the amount it adds to its gasoline, which would be between 3% and 10%. However, this is all something for the future. It will not happen before 2008," says Paulo Roberto Costa, director of Supply at Petrobras.

According to Costa, at the moment, the priority for Petrobras is the domestic Brazilian market. Costa explains that ethanol exports on the scale that Japan needs would require an increase of around 40% in ethanol production in Brazil.

"We have to ensure that we have buyers in Japan and adequate production in Brazil," declared Costa, making it clear that Petrobras is not and will not be involved in the production of sugarcane-based ethanol (in the case of ethanol, Petrobras is a distributor).

However, he added that a deal with Japan would certainly be good for both the industrial and farm sectors in Brazil.

Costa revealed that in 2005 Petrobras exported 50 million liters of ethanol to Venezuela as part of a long-term deal to substitute lead in gasoline for less polluting ethanol in that country.

In 2004, total exports of ethanol by Brazil reached 2.5 billion liters.

Industrial Output

Brazil’s industrial sector output rose 0.6% in November, compared to October. The cumulative increase for the year, from January to November 2005, was 3.1%, reports the Brazilian government statistical bureau (IBGE).

The IBGE survey found that production was positive in 15 out of 23 economic segments it studied, with the highlights in food, machinery, electrical equipment, rubber and plastics, perfumes, soap and cleaning products.

Weak performance occurred in chemical products, electronic materials and communications equipment, petroleum refining and production of ethanol, and tobacco.

The IBGE says the modest rise in production in two consecutive months, October and November, has not completely offset the sharp drop of 2.2% in September.

ABr

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