Exports of anhydrous ethanol from Brazil to the US dropped to only 22.3 million l. in the 3 months through June, compared with 376.2 million l. shipped to the US in the same period last year.
“The reduction in direct exports to the US has been offset by a large increase in exports to India, Japan, and South Korea,” said the Brazilian Sugarcane Industry Association. The group gave no other reason for the fall of US exports in their latest report. Ethanol exports since the beginning of the harvest totaled 985 million l., down from 1.1 billion l. in the same period last year. Exports to Caribbean countries and to Europe remained at about the same levels as last year, officials said.
June rains reduced the number of days for harvesting and crushing cane in south-central Brazil, impacting production of anhydrous ethanol. Ethanol production in the second half of June reached 1.424 billion l., 8.2% below the same period last year in the region. That included 359 million l. of anhydrous ethanol and 1.065 billion l. of hydrous ethanol. “From the beginning of this harvest to the end of June, anhydrous ethanol production in south-central Brazil totaled 1.532 billion l., down 23.84% from the same period a year before,” said the sugarcane association. Hydrous ethanol, used to fuel Brazil’s rapidly expanding fleet of flex-fuel vehicles, reached 5.95 billion l., up 40.29% from the same period in last year’s harvest.
Demand for anhydrous ethanol has been stable in the Brazilian market this year, despite increased sales of flex-fuel cars, officials said. Sales of hydrous ethanol increased 25% in April-June from the same period a year before, with shipments by producing mills totaling 1.92 billion l., up 1.5% from May, said officials.
Brazil is the world’s largest producer of sugarcane, the second-largest ethanol producer behind the US, and one of the biggest consumers of ethanol. Its expanding flex-fuel vehicle fleet now accounts for more than a third of the country’s entire light-vehicle fleet.
Despite a slight increase in prices paid to producers, ethanol is still priced below production costs in the Brazilian market. As a result, the price of ethanol at the pump is competitive with that of gasoline, unlike the situation in the US.
Kia considers alternatives
Meanwhile, despite the push for alternative fuels, there are yet no diesel, no electric, and no hybrid cars on the US showroom floors for Kia and Subaru, two of the only three auto brands to increase sales this year when bigger companies have trouble attracting customers, according to Carlist.com online newsletter.
That doesn’t necessarily amount to a rejection of alternative fuels. Michael Sprague, vice-president of marketing for Kia USA, said his company’s success during the economic downturn is the result of “focus” and heavy advertising.
“We’re looking at diesels and turbos and hybrids and LPGs and all those things because we recognize there is a desire for those things here,” said Sprague in a video interview on the web site. “We do have a lot of those things available in other parts of the world.”
As for Kia’s interest in alternate fuels, Sprague said, “Hydrogen is probably too far out simply because we don’t have the infrastructure here in the US. From my perspective, the government has to set the course there.”
He said, “Electric cars are mostly for consumers who want a commuter vehicle, but again there is the problem of infrastructure.” Sprague said, “If you’re driving the vehicle, how are you going to get it charged? If you’re in a town or municipality are they going to allow you to plug it and get it charged?”
Meanwhile, he said, other manufacturers who have brought hybrids to the US “are doing very well.”
In the US market, Sprague said, “Diesel still seems to be somewhat of a niche. A lot of it is just about people not understanding diesel technology.”
In Europe, of course, diesel “is very common and less expensive than traditional petrol,” said Sprague. Such markets make a diesel model “almost a cost of entry” for a car manufacturer.
For Kia to bring its diesel vehicles into the US, Sprague said, “There are a lot of US regulations, and the company would have to ameliorate its diesel engines to meet the very strict US requirements.”