U.S.-Brazil ethanol swap seen in '12 - Des Moines Register

Article by Phillip Brasher for the Des Moines Register - Jan. 6, 2011

WASHINGTON - The ethanol subsidy may be history, but government policies can still produce crazy economics in the biofuel business.

Exhibit A: Brazil and the United States, the world's two largest producers of the gasoline additive, are expected to swap some of their supplies this year.

Last year, Midwest ethanol producers shipped an estimated 250 million gallons of their product to Brazil, which ran short of the biofuel for its domestic market. Production in Brazil has fallen amid high sugar prices and a succession of poor harvests.

But Brazil still shipped a small amount of ethanol to the United States in 2011, and exports are expected to increase this year because of U.S. regulations that rate the Brazilian biofuel that's distilled from sugar cane as better for the environment than the U.S. version made from corn.

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