Brazil corn ethanol production to jump 86pc: Unem

Corn ethanol production in Brazil is on track to jump by 86pc in the 2020-21 season as new capacity comes on line this year, according to Guilherme Nolasco, president of the Brazilian corn ethanol producers' association Unem.

Unem estimates that corn ethanol output will reach 1.4bn liters (24,125 b/d) in the 2019-20 season that ends on 31 March 2020, and production will rise by 86pc to 2.6bn l in the 2020-21 season.

Nolasco told Argus that three new corn ethanol plants will begin operating this year, adding more than 1bn l to the country's overall annual production capacity. FS Bioenergia's 530mn l/yr plant in Sorriso, Mato Grosso state is expected to begin operating next month. CerradinhoBio is also slated to launch its 230mn l/yr plant in Chapadao do Ceu, Goias state by June.

Later this year, Etamil will begin operating with 290mn l/yr plant in Campo Novo do Parecis, Mato Grosso. The plant is owned by sugar cane ethanol producer Coprodia.

Looking ahead, Nolasco said another seven corn ethanol plants are currently under construction, which will further boost output in 2021.

Nolasco added that Mato Grosso's two largest cane mills – Barralcool and UISA –are currently considering adding corn ethanol processing capacity to their cane mills.

"For roughly 35pc of the cost of a new mill, an existing plant can add corn ethanol processing capacity, which allows it to operate year round," Nolasco said.

In the second half of December 2019, corn ethanol accounted for 66pc of total ethanol output in the center-south region, according the Brazilian sugar and ethanol producers' association Unica. Five corn ethanol plants were operating in early January.

Unem estimates that by 2028, corn ethanol production will increase to 8bn l, which will represent 19pc of Brazil's total ethanol output, up from roughly 4pc of total output in the 2019-20 season.

Nolasco highlighted that the corn ethanol industry has played an essential role in adding value to corn produced in the center-west region, and he discarded the risk of corn shortages.

Brazil is projected to harvest 98.7mn to of corn in the current 2019-20 season, down slightly from the 100mn t in the previous 2018-19 season, according to the government's crop supply agency Conab. Mato Grosso's corn harvest will reach 31.6mn t in the 2019-20 season, according to the state agricultural economic institute Imea.