Uncertain economic prospects weigh on industrial ethanol

World ethanol production will fall in 2011 ending a record run which lasted for more than ten years. The main reason for this poor performance is the situation in Brazil where lower than expected cane supplies and high sugar prices on the world market prompted millers to neglect ethanol production. The result is that Brazil, once one of the major drivers of growth in world ethanol production, is likely to produce 5 bln litres less in calendar year 2011 than in 2010. This shortfall could not be compensated for by substantial increases in the United States and Asia. Growth in European production also remained behind earlier expectations as high grain prices and competition from cheaper imports resulted in poor capacity utilisation rates.

With 2011 almost history, attention is now turning to next year. While the fundamentals of the industry look sound with grain and sugar prices declining from their historical highs, the macroeconomic environment remains a worrying factor.

… Full text: renewablechemicals.agra-net.com/2011/11/1046/

Keywords: political, agenda, local markets, take-overs, gap, state intervention