http://westernfarmpress.com/government/us-opens-market-impor...This should mean a flood of imported ethanol from sugarcane especially from Brazil. Article says that cane ethanol is greener than corn based ethanol.End of blender tax credit should remove one incentive to use ethanol.It will be interesting to see how the market adjusts. We will learn soon if corn ethanol can compete. And what will happen to ethanol pricing in Brazil?
End of blender tax credit should remove one incentive to use ethanol.Doesn't matter. Federal mandate requires the use of ethanol.Steve
But Brazilian ethanol will probably be cheaper in ports along the Gulf and east coast. So corn based ethanol probably won't get shipped as far.Then comes the secondary effect on corn prices. The market should seek out a new equilibrium point.Ethanol use requirements in gasoline are complex. Some states have their own requirement. Some fed regulations require unspecified oxygenates. Ethanol was chosen by oil companies when Congress refused to protect them from MTBE lawsuits--MTBE being the other oxygenate available for blending.And there are some ethanol mandates which are being adjusted due to nonavailability of cellulosic ethanol.
Then comes the secondary effect on corn prices. The market should seek out a new equilibrium point.And farmers, who overlevered themselves to produce corn, crash and burn and the real estate bubble that popped in Vegas and Florida 3 years ago finally comes to Iowa.So with the farm belt crashing, more will be imported from Brazil, until some bright lad in DC stands up and asks "why are we replacing imported oil with imported ethanol?", and the ethanol mandate goes away.Steve
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