Biggest Sugar Cane-Ethanol Mill May Help Brazil Fight Inflation

Bloomberg
By Stephan Nielsen - Aug 22, 2011 2:34 PM CT .

Petroleo Brasileiro SA (PETR4), Brazil’s state-controlled oil company, is building the biggest sugar cane-ethanol plant as the country seeks to stabilize prices for the renewable fuel and fight inflation, said Salim Morsy, an analyst at Bloomberg New Energy Finance.

Petrobras’ biofuels unit and Sao Martinho SA, which own the Boa Vista mill through their Nova Fronteira Bioenergia SA joint venture, said they plan to invest 521 million reais ($325 million) to expand production to 700 million liters (185 million gallons) a year.

That would make the plant in Goias state the biggest in the world converting sugar cane into fuel, and the expanded production will help Brazil stockpile ethanol in advance of the rainy season when mills shut down, Morsy said in an interview today. Ethanol prices almost doubled between January and April after supplies ran short, driving up inflation.

Read more