New import rules will protect Brazil’s ethanol producers

Brazil is adopting measures to limit the import of U.S. ethanol and to protect its own sugarcane-based ethanol producers.

In a report from the Rio Times, Brazil’s energy minister Fernando Coelho says Brazil will impose rules requiring ethanol importers to maintain minimum stocks of ethanol to serve Brazil’s market.  Similar requirements are already in place for Brazil’s domestic ethanol producers.  The new rules will result in importers having to invest in storage infrastructure, which, it is expected, will take some of the smaller operators out of the picture.

Brazil’s ethanol production has lagged because sugarcane millers are shifting production to higher-priced sugar instead of ethanol.  That’s prompted more ethanol imports, mostly from the U.S.  Brazil’s producers asked for tariffs to be imposed on imported ethanol, which Brazilian officials are avoiding because of possible retaliation.

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