US Steep Surtax Should Draw Brazil to European and Japanese Ethanol Markets

Producing ethanol out of sugar cane in Brazil Brazil may become an international price setter for ethyl alcohol, should ethanol become an international commodity. This because the country has acquired throughout the last few decades knowledge to control production technology and diversify the quality of cane produced in the country.

This is the opinion of Brazilian economist Felix Schouchana, the director of Agricultural Markets at the Brazilian Commodities and Futures Exchange (BM&F).

To Schouchana, the biggest advantage of the visit of American President, George W. Bush, to Brazil last week, during which he signed memorandums of understanding in the field of biofuels, was exactly that of attracting attention and giving visibility to ethanol produced in Brazil.

"Bush's visit was very good, marketing-wise, as a means for promoting Brazilian ethanol to the rest of the world. Brazil will definitely be the main international agent in this process of transforming ethanol into a commodity and of catering to the growing international demand for the product," he said.

In the economist's assessment, the increase in Brazilian production should cater to countries other than the United States, where imported alcohol consumption is severely restricted as a result of surtaxing.

Still according to the assessment of the Markets director at BM&F, Brazil must turn to markets in countries where there are not many alternatives of renewable energy sources.

"This is the case with the majority of European countries, which are unable to increase their production of alternative sources of energy".

"Japan, with its growing demand, is also an option," he claimed. The decision of trying ot turn ethanol into an international commodity will only benefit the country, he believes.

"We have the technology in our hands, we have variety of cane with quality and efficiency, distilleries and plants with high productivity, and we can transfer technology to other countries," he said.

Bahia's Grain Crop

The grain crop in the northeastern Brazilian state of Bahia for 2006/2007 reached 5.058 million tons. The volume is a record high for the state, and represents a 22.2% increase compared with the previous period.

The figures were provided by the National Food Supply Company (Conab). One of the highlights is corn production, which reached 1.130 million tons, a 64.7% increase in comparison with the previous crop.

Soy production in Bahia reached 2.248 million tons, a result 12.8% higher than in the previous crop. According to Conab, the increase was mostly due to higher productivity. Each hectare produced 2,640 kilograms of soy this year, against 2,282 in the previous period.

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