Election offers Brazilian ethanol producers renewed hope

Fonte: Recharge

Barack Obama previously voted against opening up the trade for ethanol exports from Brazil, but it looks as if he is ready to change his mind.

Obama’s nomination of Tom Vilsack to the post of agriculture secretary, and his push for renewable energy as part of the answer to fixing the world financial crisis, have given Brazilian ethanolproducers renewed hope.

(…) “Obama is distancing himself [from Bush’s oil-friendly policies] and searching for alternative energy solutions,” says Joaquim Tavares de Paiva Muniz, an arbitration lawyer who works in the energy sector for Brazilian firm Trench, Rossi and Watanabe. Obama is taking a stand to end that pattern. His alternative energy infrastructure investment proposals are a defining part of Obama’s plan to ‘fix’ the financial crisis, Muniz says.

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Producers take long way round and send exports on a Caribbean cruise.

A Caribbean loophole provides a way to keep Brazilian ethanol exports afloat despite obstacles erected by the US Farm Bill.

As the US extends a $0.54-a-gallon tariff on their product, Brazilian ethanol producers’ best bet (unless they can negotiate away the tariff) is to ship ethanol tax-free to the US under the Caribbean Basin Initiative. At the moment, 2.3 billion litres of ethanol is permitted into the US through the Caribbean. The amount is capped at 7% of annual US consumption, an amount that has never been reached.

(…) But demand for ethanol in the US is weakening with falling oil prices. “The big difficulty today is that the price of oil is very low,” says Joaquim Tavares de Paiva Muniz, an arbitration lawyer who works in the energy sector for the Brazilian firm Trench, Rossi and Watanabe.

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