Brazil Study Shows 30 Ethanol Mills Near Bankruptcy, Valor Says
Source: By Vanessa Dezem, Bloomberg • Posted: Wednesday, October 1, 2014
The mills, with a combined capacity to process 60 million metric tons of sugar cane, have delayed payments to suppliers for several months and aren’t operating, the Sao Paulo-based newspaper said, citing a study by Ricardo Pinto Associados, a firm that provides services and research to Brazil’s sugar and ethanol industry.
Government’s efforts to contain inflation by blocking state-run Petroleo Brasileiro SA from raising gasoline prices have made ethanol less competitive in a market where most drivers have the option to chose between gasoline and ethanol to power their so-called flex-fuel cars.
Only 25 percent of Brazil’s flex-fuel cars were filled up with ethanol last year, down from 82 percent in 2009, as the fuel has become relatively more expensive than gasoline when performance is taken into account, research firm Datagro said in a report in December.