April 2010 - A First Look At The Prospects For The Brazilian Ethanol Market In 2010/11
Brazils Grip on Ethanol Exports Weakens as US output hits record levels
Brazil's hold over the supply-side of the global ethanol trade has begun to weaken, as US ethanol output reaches record levels, according to Czarnikow, one of the UK's oldest sugar traders.
Czarnikow said in its monthly Biofuels Review that a combination of tighter availability and increasing self-sufficiency around the world has resulted in Brazilian ethanol exports falling by 50% from the previous year.
In contrast, US ethanol output has soared to record levels of above one billion gallons per month. This is due to a large amount of new capacity coming online, in addition to closed plants reopening and utilisation rates increasing, due to recent high operating margins.
US demand has fallen short of output leading to an exportable surplus. Weaknesses in the corn market have also contributed to depressed ethanol values, increasing the US's competitiveness on the global ethanol market.
Czarnikow said the surplus in the US is unlikely to be resolved for some time, leading to trade flows out of the US continuing to dilute Brazil's market share.
Henry Toller, biofuels analyst at Czarnikow, said: "While it is unlikely that Brazil will turn from an exporter to an importer, the US stands ready to export into new markets."
