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October 23, 2019

Brazil could have 16 Corn-Based Ethanol Facilities by 2021

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

One of the major innovations in Brazilian agriculture in recent years has been the production of ethanol from corn instead of the traditional sugarcane. This new trend is certainly evident in the state of Mato Grosso where there could be 11 corn-based ethanol facilities by 2021. In all of Brazil, the number of corn-based ethanol facilities could reach 16 or more by 2021.

There are currently 6 corn-based ethanol facilities in operation in Mato Grosso and 5 more are scheduled to be built over the next two years. According to the National Corn Ethanol Union (Unem), two facilities are in the final phases of construction and should be operational by the end of next year in the cities of Sorriso (central Mato Grosso) and Campo Novo do Parecis (western Mato Grosso). Three more are scheduled to be built by the end of 2021 in Nova Marilandia and two in Nova Mutum (all three are in the mid-north region of Mato Grosso).

Of the current 6 facilities operating in Mato Grosso, three are stand along corn-based ethanol facilities and three are traditional sugar mills that have been retrofitted to utilize corn during the time of the year when sugarcane is not available (generally December through March).

Corn-based ethanol production started in Mato Grosso in 2012 with the retrofitting of a sugar mill to utilize corn during the rainy season when they do not harvest sugarcane. The first several conversions were so successful that many sugar mills are undergoing similar retrofitting. The first stand alone new corn-based ethanol facility in the state opened in June of 2017.

Corn ethanol production in the state increased 66% from 2018 to 2019. In 2019, the state produced 1.1 billion liters of ethanol and that is expected to increase to 2 billion liters in 2020.

Mato Grosso is the largest corn producing state in Brazil, so it not an accident that the state is also the largest producers of corn-based ethanol. The Mato Grosso Institute of Agricultural Economics (Imea) estimates that the state will produce 32 million tons of corn in 2019/20 and that corn production will continue to increase in the years ahead. The National Corn Ethanol Union also expects corn-based ethanol production to continue increasing as well.

In addition to the corn-based ethanol facilities in Mato Grosso, there are five other facilities operational in Brazil with three in the state of Goias, one in Sao Paulo, and one in Parana.

The vast majority of Brazil's ethanol continues to be produced from sugarcane mainly in southeastern Brazil. At one point there were more than 400 traditional sugar mills in Brazil, but that number has now slipped to below four hundred.