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February 25, 2019

Ethanol Produced from Corn Increasing Rapidly in Brazil

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Everything is on the upswing for corn-based ethanol production in Brazil. In 2018, Brazil produced 800 million liters of ethanol from corn (670 million liters were produced in Matos Grosso) and the total production in 2019 is estimated at 1.4 to 1.5 billion liters. Counting the corn-based ethanol facilities that are currently under construction (4), the production is expected to increase to approximately 4 billion liters in 3 to 4 years. Six years after that, corn-based ethanol production in Brazil is expected to double again.

The first corn-based ethanol facility in Brazil started production in June of 2017 and there are currently 4 corn-based ethanol facilities under construction and six more in advanced stages of planning. Most of Brazil's corn-based ethanol production is located in the center-west region, where there is a surplus of corn, especially in Mato Grosso. The surplus of corn usually results in low corn prices, but the increasing demand for corn to produce ethanol is expected to support corn prices.

Corn based ethanol has been produced in Brazil for six years. The first production came from sugar mills that had been retrofitted to utilize corn during the summer rainy season when sugarcane is not available. The results of retrofitting sugar mills have been so successful that more mills are doing the same thing and new mills are also being built as flex facilities, which are capable of using either sugarcane or corn.