2023-09-23 13:17:00
A global sugar shortage that has pushed prices to the highest level in 11 years is finally on the verge of ending, thanks to an apparently unrelated agricultural crop, reports the economic news agency Bloomberg. , quoted by Agerpres.
SugarPhoto: Olga Kriger / Alamy / Alamy / Profimedia
Corn production in Brazil, a major global agricultural producer, has exploded, making it more profitable to use corn to make ethanol, a key fuel for cars in Latin America’s largest economy. As a result, processing factories that until now used more expensive sugarcane as raw material are now looking to produce more sugar and less biofuel.
“Anyone with money today is looking to invest in either corn ethanol or expanding sugar production capacity,” said Eder Vieito, analyst at Green Pool Commodity Specialists.
The drop in sugar prices would be good news for consumers struggling with food inflation. Extreme temperatures have affected sugar cane crops in India, the world’s second largest producer following Brazil.
Analysts: Ethanol from corn will know several years of expansion
Corn is beginning to have a larger share of the ethanol market in Brazil, which is surpassed only by the US as the top biofuel producer. Corn ethanol will account for regarding 20 percent of total ethanol production this season, up from nearly zero five years ago. By 2033, the proportion of ethanol from corn might reach up to a third of the total production, estimates the consultancy firm Datagro.
Analysts’ consensus is that corn ethanol will experience several years of expansion. Brazil has eight plants that produce ethanol from corn and are increasing their capacities, while another seven plants are under construction, according to analysts at Itau BBA. Raw material supplies are also abundant: analysts estimate that Brazil will consume a record 13 million tons of corn this season for ethanol production, a tenth of its total corn supply.
That’s good news for corn producers in the state of Mato Grosso, Brazil’s main corn producer. There is significant potential for corn to capture a larger share of the ethanol market, estimates farmer Zilto Donadello. “Ethanol from corn still has a lot of room for growth”, believes Zilto Donadello.
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