Monday, July 15, 2024
HomeAll NewsEthanolEthanol will create new prospects for Brazilian corn in domestic market

Ethanol will create new prospects for Brazilian corn in domestic market

Arthur Neto, partner director at Alphamar Shipping Agency, emphasized the significant potential of ethanol to open up new opportunities for Brazilian corn in the domestic market. He projected a substantial increase in corn usage for ethanol production, estimating it to reach 17 million metric tons in the upcoming marketing year, reported S&P Global Commodity Insights.

Speaking at the IGC Grains Conference in London, Neto highlighted the implications of this trend on both domestic and export markets. He noted that the heightened utilization of ethanol from corn would lead to an upward pressure on prices. This, in turn, would incentivize corn production, especially in a scenario where the domestic market is saturated with surplus corn.

Neto explained that the anticipated surge in corn allocated for ethanol usage in the 2024-25 marketing year, compared to 13.26 million metric tons in 2023, would contribute to driving prices higher in the domestic market. Consequently, producers would opt to retain corn stocks domestically rather than exporting, unless competitive prices are offered.

When questioned about the competitiveness of Brazilian corn in the current season, Neto emphasized the buoyant domestic market conditions, indicating that farmers are less inclined to sell at low prices for international export. Despite incentives for export, he anticipated that farmers would prioritize domestic sales due to favorable market conditions, thereby potentially limiting export volumes compared to previous years.

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