U.S. Ethanol Production Continues to Skyrocket as Exports Surge
February 22 2012 - 8:20AM
Marketwired
Shares of ethanol producers have performed well in 2012 as demand
continues to grow. A new report from Pike Research estimates that
production of biologically-based fuels -- such as ethanol and
biodiesel -- will increase from $82.7 billion in 2011 to $185.3
billion by 2021. Pike Research expects the Americas (the two
largest producers of ethanol in the world are the U.S. followed by
Brazil) to account for 71 percent of total global biofuels
production for most of the 2012-2021 period. Five Star Equities
examines the outlook for companies in the ethanol industry and
provides equity research on BioFuel Energy Corporation (NASDAQ:
BIOF) and Archer Daniels Midland Company (NYSE: ADM). Access to the
full company reports can be found at:
www.fivestarequities.com/BIOF
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According to a U.S. energy sector report from EIC Consult,
ethanol production will continue to increase this year, with the
U.S. exporting ethanol in greater amounts. EIC DataStream indicates
that there are 42 future and active biofuel projects in the
U.S.
According to the Washington, D.C.-based Renewable Fuels
Association (RFA), 1.1 billion gallons of ethanol -- worth about
$2.5 billion -- were exported to other nations, three times more
than was exported in 2010. Exports accounted for 8.6 percent of
U.S. ethanol production in 2011, according to the RFA, up from 3
percent in 2010 and 1 percent in 2009.
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According to the RFA, the major importer of U.S. ethanol was
Brazil, with 33 per cent of the ethanol exports for the year
heading to the South American giant. According to Ethanol Producer
Magazine, Brazil has had a high demand for ethanol and low
supplies, due to a variety of factors. Brazil's sugarcane season
officially ends in March, but a Jan. 16 press release from UNICA,
the Brazilian Sugarcane Industry Association, revealed that 2011
ethanol production from April to December was down 18.74 percent
from the same time period in 2010.
Brazilian imports could drop sizably in the coming years,
however, as the RFA recently called for an investigation into news
that the Brazilian state of Sao Paulo planned to impose a 25
percent tax on all imported ethanol. "Because ethanol produced in
Sao Paulo is tax exempt, ethanol imported into Sao Paulo from the
United States and other areas is at a substantial economic
disadvantage," wrote RFA President and CEO Bob Dinneen.
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