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Weekly UpdatesThe world demand for energy is such that even seeming improvement in potential supply solutions creates political uproar. Such is the case with ethanol. And nowhere is the uproar louder than in the Latin American region.
The basic conflict is: Should the world's finite growing area be planted to provide food security or energy.
The two major feedstocks for ethanol production are corn and sugarcane. Sugar beets can also be used. And various grasses and other biomass can be used as well, but with varying degrees of efficiency.
Corn is also the basis for national cuisines in the Latin American region-a staple food that, normally, is affordable for the huge poor population of the region (see the "Product Focus" on "Corn," Market: Latin America, June 2007 15:6.)
The two world leaders in ethanol production are Brazil as number one, and the United States (US), number two. In Brazil, ethanol is produced from sugarcane. In the US ethanol is produced from corn.
US corn is exported to the Latin American region, and recently the price has been rising because of the production devoted to ethanol, creating political problems, for example, in Mexico. Detractors of the US in the region are only too happy to exploit the issue and inflame passions that depict starving populations if corn is increasingly planted to fuel the energy hungry vehicles driven by Americans.
The argument is not entirely without merit since livestock also require corn for feed. According to an April 20, 2007 Christian Science Monitor (Boston) report, poultry industry executives are beginning to complain about the cost of feed. And environmentalists are wondering about the extra fertilizer required for corn planting and a negative impact on the environment.
Sugarcane is over four and one quarter times as efficient in producing ethanol as corn. And according to a May 2007 report in Tendencias, a quarterly market research newsletter published by InfoAmericas (Miami), Brazil's sugarcane based ethanol industry is in a much more favorable position than the US ethanol industry not only because of the superior efficiency of sugarcane, but also because of the availability of land than can be planted with sugarcane.
Tendencias says that land in the US suitable for corn for ethanol feedstock is fully planted. Whereas, only 2.8 percent of land available for sugarcane stock in Brazil is planted.
The Brazilian advantage is such that there is talk of an OPEC for ethanol.
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