Cheaper Ethanol from Brazil Could Cripple U.S. Producers

[Fledermaus]

Rumor has it that Brazil's ethanol producers are getting ready to invade the U.S. market. Many will be willing to swallow the 54-cent tariff (which is expected to expire in 2009) imposed on their ethanol. Joao Val, CFO of Sao Martinho SA, one of Brazil's leading ethanol producers, believes "Brazil is going to be much more aggressive this summer to sell ethanol...in the U.S."

With U.S. corn ethanol currently selling at a high price of $2.48 per gallon, many Brazilian companies see a lucrative opportunity in exporting their cheap sugar-cane based alternative. Even with the tariff included, Americans currently get to purchase Brazilian ethanol at a bargain price of around $2.18 a gallon. This number is bound to go even lower with Brazil harvesting a record-breaking sugarcane crop of over 500 million metric tons.

This only spells trouble for the U.S.'s nascent ethanol industry, as U.S. producers are already struggling with high corn prices. Currently hovering around $6 a bushel, corn prices are expected to go even higher as the USDA recently announced an 8% expected drop in U.S. corn plantings.

http://seekingalpha.com/article/72333-cheaper-ethanol-from-brazil-could-cripple-u-s-producers

[liberal N proud]

1. This is one import I might support

Maybe it would mean that our farmers can get back to feeding the world. Ease the price crunch on food.

[DAGDA56]

2. I was just thinking the exact same thing...my only hesitation...

...is if the Brazillian sugar farmers are trashing the Amazon in the process of producing cheap cane.

[WCGreen]

3. Real good idea....

Then we can start growing crops for food once again...

That should bring the price down for all of us less affluent folks who are effected by the so-called volatile part of the CPI...

[TechBear_Seattle]

4. If American energy producers cannot wring Americans for every last penny

They are crippled. That, in turn, means the US economy will take a nose-dive, unemployment will reach levels not seen since the Great Depression, wives will become lesbians, God will send natural disaster after natural disaster, lions will lay down with lambs.... Chaos!

Poor, poor American fuel producers. They absolutely HATE IT when someone is less greedy than they are. :eyes:

[Kolesar]

5. What stupid concept

Brazil is basically exporting their topsoil to the United States. This will drive up food and commodity prices in Brazil. And this is ultimately unsustainable because sugar-cane production is still dependent upon petroleum, and natural gas I believe.

[tama]

6. Yeah

The southeners are bowing to the might of the Eye in the dollar bill, forcing hobbit farmers into plantation slaves to produce fuel for the machines. You know whose Eye...

[Tesha]

7. Good. ADM's approach is profitable for them and ridiculously stupid for everyone else. (NT)