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July 8, 2019

Another Corn-Based Ethanol Facility set to open in Mato Grosso

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

The most recent corn-based ethanol facility in Mato Grosso, which is located in the city of Sinop in northern Mato Grosso, will start operations within 15 days according to the governor of the state and the director of INPASA, which is the company building and operating the facility. When fully operational, the R$ 750 million real facility will have 250 employees and be responsible for 3,000 indirect jobs. There were 1,800 construction jobs generated as the facility was being built.

The Sinop facility will consume 2,000 tons of corn per day or 720,000 tons per year and produce 1.5 million liters of ethanol per day and 100,000 liters of corn oil. In addition, the facility will also generate electricity and produce dry distiller's grain which will be a benefit for the livestock industry in the state.

INPASA's director indicated that the facility has a very high level of technology from 22 different countries. He also indicated that Mato Grosso has the cheapest corn in the world with the potential for a tremendous expansion in corn production.

INPASA is also constructing a similar corn-based facility in the city of Nova Mutum, which is located in central Mato Grosso. The initial ground work has been completed for the facility and 70% of the needed construction materials have been purchased. This facility is scheduled to start operations during the second half of 2020. It is also expected to consume 720,000 tons of corn per year. The company has stated their intension to invest in other corn-based ethanol facilities in the state and they are already in the process of selecting additional sites.

Corn prices in Mato Grosso are cheap primarily due to the high cost of transporting the grain to distant export facilities. During the peak of the corn export season, it can cost as much as $2.00 a bushel or more just to transport the corn to export facilities, which can be as far as 2,000 kilometers from northern Mato Grosso. Approximately, 60% of the corn is transported by truck, which is the most expensive mode of transportation.

That is why farmers in the state and state officials have been pressuring the federal government to complete the paving of highway BR-163 from northern Mato Grosso to the Amazon River in order to facilitate the movement of grain to ports in northern Brazil. They also want the construction of the "Grain Railroad" from northern Mato Grosso to the Amazon River to be approved as soon as possible.

The majority of Brazil's corn export originate from the safrinha corn crop, which is planted after the first crop of soybeans are harvested. Safrinha corn production accounts for approximately 72% of Brazil's total corn production. Mato Grosso is the largest safrinha corn producing state responsible for approximately 42% of Brazil's production. The state of Parana is second with 19% of Brazil's safrinha corn production. Brazil is now the second largest corn exporter after the United States.