Lagging U.S. sales of E85, lax trade restrictions and Brazil's worst sugarcane harvest of the last decade will allow the United States to overtake the South American nation as the world's leading ethanol exporter during the second half of 2011, the U.S. Energy Information Administration (EIA) announced last week. Okay, officially, the EIA said it was "likely" to happen, but when you put all the pieces together, we think "likely" = "will."
With U.S. corn-based ethanol relatively inexpensive, U.S. ethanol producers have been able to win out contracts to supply countries that previously imported ethanol from Brazil. U.S. farmers have also benefited from Brazil eliminating its 20-percent import duty and lower European tariffs on ethanol.

Since the federal renewable fuel mandate classifies sugarcane ethanol as an advanced biofuel, but corn-based ethanol as only a biofuel, it's quite likely the United States will continue to export corn-based ethanol to Brazil while at the same time importing mass quantities of the sugarcane-based biofuel from Brazil. This looks like we're moving towards a future that puts us right back where we started: relying on foreign fuel.


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