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March 14, 2019

Another Corn-Based Ethanol Facility announced for Mato Grosso

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

Brazil is famous for its sugar/ethanol mills and millions of hectares of sugarcane production, but the new trend emerging in Brazil is to make ethanol from corn instead of sugarcane. The newest corn-based ethanol facility in Mato Grosso just received clearance for construction from the state's environmental agency. The newest facility will be located in the city of Nova Mutum in central Mato Grosso and it will be operated by Ethanol Industriado Combustiveis S.A. The new facility will be adjutant to Highway BR-163, which is the main highway in the state.

The new facility will have the capacity to process 529,000 tons of corn per year. In addition to producing ethanol, the facility will produce dry distiller's grain that can be used in animal rations, corn oil, and electrical energy.

This newest facility joins a growing list of corn-based ethanol facilities in the state. The first corn-based ethanol facility in Brazil was opened in 2017 in the city of Lucas do Rio Verde in central Mato Grosso and it is operated by FS Bioenergy. The same company is already expanding their first facility and they will open a second corn-based facility in the city of Sorriso, which is also located in central Mato Grosso. In the city of Sinop in northern Mato Grosso, a new facility will be built by Impasa and in the city of Alto da Gloria, a group from Paraguay will also construct a corn-based ethanol facility.

In addition to the facilities already announced, numerous others are in various stages of planning. Additionally, several sugar/ethanol mills in the state that utilize sugarcane have been retrofitted to utilize corn to make ethanol during the summer rainy season when sugarcane is not available.

In a recent study released by Conab, they indicated that for the 2017/18 growing season, approximately 25% of the ethanol produced in the Mato Grosso came from corn which is cheaper to produce than ethanol produced from sugarcane. Ethanol production in Mato Grosso increased 37% over the past three years with corn being a major contributor to the increase.

During the 2018/19 growing season, 2-4 million tons of corn will be used in Mato Grosso to make ethanol depending on how soon some of the new facilities come online. Only a small percentage of the 30 million tons of corn produced in the state per year is utilized within the state, so any additional domestic demand for corn is welcomed news for corn producers in the state. They are hoping that increased demand for corn will support corn prices.