Rabobank Report: The Future of Ethanol - Brazilian and U.S. Perspectives

The Wall Street Journal's MarketWatch
March 1, 2012, 12:25 p.m. EST

NEW YORK, March 1, 2012 /PRNewswire via COMTEX/ -- A new report from Rabobank's global Food & Agribusiness Research and Advisory department on the future of ethanol provides a look at recent developments and current situations in both the Brazilian and United States markets, and perspectives for 2012 and beyond.

Current Landscape

In the report, Rabobank points out that the beginning of 2012 has seen significant changes in U.S. ethanol policy. The VEETC blending credit and a tax on ethanol imports both expired in December 2011 and U.S. ethanol industry groups have shifted their political weight toward initiatives like E15 and advanced biofuels.

Although these developments improve Brazil's access to the U.S. ethanol market in 2012, the reality is that the Brazilian cane industry may struggle to fully satisfy even its own domestic demand in 2012 owing to a sharp downturn in cane production and an uncertain outlook for output growth. Brazil became the leading importer of ethanol from the U.S. in 2011, a situation many would have considered unthinkable only a few years ago.

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