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Corn ethanol boosted due to production in Brazil

Brazil’s corn ethanol sector booms on an increase of production and investments, according to a Global Agricultural Information Network (GAIN) report from the US Department of Agriculture (USDA).

The UNEM forecasts the country to produce about 2.5 billion liters of corn-based ethanol in the 2020-21 marketing year.

Currently, there are 16 corn ethanol plants in Brazil and at least four are corn-only plants, while the rest are flex plants that produce ethanol from both sugarcane and corn.

Due to plentiful and generally cheap corn supplies in Brazil, at least seven other corn-based ethanol plants in the planning, development to construction stage, which are expected to come online in the next two years according to the USDA.

Brazil’s corn ethanol production could total 5.5 billion liters per year, consuming 13 million tons of corn annually, if all ongoing ethanol plant construction projects are completed. The plants are slated to begin operations in 2021 or 2022.

In 2019, the USDA estimates Brazil produced 37.38 billion liters of ethanol, 96% of which came from sugarcane. It produced 1.33 billion liters in 2019 but the USDA anticipates it to a total of 8 billion liters by 2028.

While utilizing corn is a small-but-growing fraction of the Brazilian ethanol industry it is expected to grow quickly over the next decade.

“The sector’s investors hope this can become an important part of Brazil’s biofuels equation, as the country’s consumption of ethanol is expected to grow,” the USDA said.

The Brazilian ethanol perspective for 2020

Last month the US Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said that Brazil’s ethanol production is expected to drop 16% as sugar-based ethanol plants divert toward sugar production.

Total ethanol production is estimated at 31.35 billion liters, down from 37.38 billion liters in 2019. Consumption for use as fuel is estimated at 27.68 billion liters, a decrease of 18% from the previous year. The FAS said this is due to social distancing measures and the economic downturn related to the coronavirus (COVID-19) pandemic.

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