Brasília – Despite the increase of sugarcane crops in areas destined for livestock farming and agriculture over the last few years, a survey disclosed on this Wednesday (26th) by the Institute of Applied Economic Research (Ipea) claims that the country will not lose its potential as a producer of foodstuffs as a consequence of that expansion. For such, however, the survey Biofuels in Brazil: Ethanol and Biodiesel highlights the need for the State to regulate the manufacturing of ethanol and ascribe priority to the production of food, providing financing and infrastructure.
According to the document, one of the main challenges facing the ethanol market is price stability, as pricing is currently highly volatile during the course of the year. Aside from the formation of a large stock starting this year, an action that should receive 2.4 billion real (US$ 1.2 billion) in the next crop, other measures geared towards preventing oscillation include the consolidation of a futures market, and exemption from tax on ethanol imports, for which the rate was 20% and was lifted by the Foreign Trade Board (Camex) in early April.
According to the survey, the international ethanol market may reach 200 billion litres in the next ten years. In the last crop, Brazil produced 25 billion litres, of which 4.7 billion were exported. Protectionism in foreign markets, however, may prevent growth, according to the Ipea.
In order to counter the rationale behind protectionism, which is based on social-environmental sustainability, the survey shows that important initiatives must be strengthened, such as the National Commitment for Improving Working Conditions in the Sugarcane Industry, established by unions, the government and industrialists; and the Agro-Ecological Zoning of Sugarcane, which forbids expansion and the setting up of new plants in the Amazon, the Pantanal lowlands and the Alto Paraguai Basin.
*Translated by Gabriel Pomerancblum
