Thanks to America, Brazilian ethanol exports are rising

nasdaq
Posted 4/10/2012 2:00 PM

A recent change in U.S. policy has allowed Brazilian exports of ethanol to increase, the Financial Times reports.

U.S. ethanol imports from South America's largest country are at their highest level since 2008 because of the elimination of American subsidies for corn ethanol (an onerous tariff that also prevented Brazilian sugarcane-derived ethanol from competing effectively with American corn ethanol) and the classification of sugarcane ethanol as an advanced biofuel by the EPA.

This development is an important step forward not only for freer trade, but for global food prices and advanced biofuels in general. Sugarcane ethanol production has little effect on world food prices, but the use of corn for biofuel unequivocally does. In addition to corn ethanol's detrimental effects on the price of food, the process to create ethanol from corn is much less efficient and more costly than sugarcane.


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