Brazil's Ethanol Export Model Needs a Face-Lift

According to this article, it looks like Brazil's transport and export infrastructure is in need of a huge makeover. According to Fabio Abrahao of International Logistics and Supply Chain consultants, Brazil's shipping ports are under heavy pressure. Abrahao states that, "ships were waiting an average of 3.15 days for a berth at the Santos Alamoa ethanol terminal (which is responsible for 80% of Brazil's ethanol exports) in 2007 and that this has risen to 5.37 days this year and will jump to 14.32 days in 2009." The reasoning behind this? Abrahao states that, "trucks are in short supply in Brazil and that some 73% of Brazil's ethanol plants are in the southeast region where they compete with other export products, such as soybeans, steel, and iron ore, for space on railroad export corridors moving to ports." With demand for Brazilian ethanol booming (especially from Japan), this problem needs to be resolved ASAP. 

Cosan recently announced its plan to invest $1 billion in a new 386-mile ethanol pipeline which would increase export capacity from 3.5 Bl/y to 14 Bl/y. The pipeline, however, is expected to start operations in the first half of 2011. 


 

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