ARCHER DANIELS MIDLAND AND GOVERNOR OF MATO GROSSO STATE SHARE COMMON INTERESTS

by Henrique Oliveira

I was initially intrigued by ADM's choice to set up a biodiesel plant in the large, landlocked state of Mato Grosso, in the Brazilian Midwest.

After all, the state, where the infrastructure is inferior to that of the more densely-populated Southeast, is very ecologically sensitive. A large portion of the Cerrado (Brazilian grasslands) and of the Pantanal (the most extensive wetlands in the world) is located there, as is a large strip of the Amazon forest, in the state's northernmost part.

ADM plans to buy soy from local farmers, process it to extract the oil, blend it with regular diesel, and resell part of the production to the farmers from whom it bought the original feedstock.

This strategy may turn out to be an effective recipe for allowing the state's monocultures to grow unchecked, as soy farmers clear forestlands and use degraded pastures to plant more soy, putting pressure on cattle ranchers to develop new grazing fields in more remote areas, where land price competition from soy is less intense.

Mato Grosso state occupies an area of 900,000 square kilometers (Texas, in comparison, covers 700,000 square kilometers), and has a population of 2,000,000. The large, thinly-populated territory makes it difficult, if not impossible, for the state's environmental and labor inspection agencies to monitor who is growing what and how, paving the way for environmental degradation and worker exploitation.

The current state governor, Mr. Blairo Maggi, praised the company’s initiative in a communiqué released by ADM. “The Government of the State of Mato Grosso recognizes the importance of renewable fuels, and we are pleased that ADM, a world leader in bio-based fuels, has chosen our state to build its first Brazilian biodiesel plant,” said Mr. Maggi.

In addition to governor of Mato Grosso, Mr. Maggi is also the largest individual soybean grower in the world, according to Reuters. In a report from May 2005, he denied being “a rapist of the forest”, responding to accusations by the international media and by Greenpeace.

At the time, he said that he “understood that people have an emotional attachment to the Amazon Forest, but that inflamed rhetoric contributes little to the discussion of how best to deal with illegal forest clearings and how to tell them apart from clearings that are legal”.

Data released in 2005 show that, between August 2003 and August 2004, forest clearing in the Amazon region reached its second-highest level ever.

Mr. Maggi became governor of the state of Mato Grosso in January 2003. He is currently serving a four-year term.

The Amazon Forest, home to 30% of the world’s plant and animal life, lost an area of 26,130 square kilometers during those twelve months. Approximately 48% of the losses took place in the state of Mato Grosso.

Yet ADM, while using the praise heaped on the company by Mr. Maggi to testify to the solidity and timeliness of the project, fails to acknowledge, at any point in its press release, that the state governor has interests that converge with its own. Nor does it make any reference to Mr. Maggi's dire environemntal record. Nor does it acknowledge that many of the permits required by law are issued by the State Forest Institute ("Instituto Estadual de Florestas"), the head of which is, amazingly enough, appointed by Mr. Maggi.

Follow what's happening in the Brazilian ethanol market on Ethablog, the only blog in English dedicated to Brazilian ethanol.

DOW JONES NEWSWIRES: BRAZIL ETHANOL CAN REPLACE 10% WORLD GASOLINE IN 20 YRS

My comments on the piece below:

The large sums described in the article below will probably arrive in the form of either direct foreign investments, such as those made by Cargill and A.D.M. in 2006, or via financial instruments such as hedge funds, like Infinity BioEnergy and Clean Energy Brazil.

Brazil today can profit from what Fed Chairman Ben Bernanke calls a "global savings glut", the partial result of what "The Japan Times" describes as "substantial medium-term institutional roadblocks to investment in many developing countries, where long-term returns now seem to be by far the highest. The net result is that money is being parked temporarily in low-yield investments in the US, although this cannot be the long-run trend."

These investments may soon unpark themselves and steer their way toward the development of ethanol-related projects in Brazil and other tropical countries. They should, however, be able to navigate the choppy waters of Brazilian business, which, though bearing a resemblance to its American and European counterparts, is different in many regards.

If any disputes arise, for instance, foreigners will discover that recourse to the law exists and generally works, but may take a maddeningly long time. Solving this and other "medium-term institutional roadblocks", then, is of paramount importance to Brazil if it wishes to attract large foreign investments (which may have to come anyway, for lack of energy alternatives).

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Go to original

By Grace Fan, Dow Jones Newswires
5511 3145 1489; brazil@dowjones.com

SAO PAULO (Dow Jones)--If the right investments are made, Brazil could replace 10% of the world's gasoline with its bio-friendly cane-based ethanol in 20 years' time, according to a study conducted by a university in Sao Paulo at the request of the country's Ministry of Science and Technology.

However, "what will be necessary is the investment of BRL20 billion ($9.5 billion) per year until then to do so," Luis Augusto Barbosa Cortez, the vice-coordinator of the study at the State University of Campinas, or Unicamp, said Monday in a phone interview with Dow Jones Newswires.

The study has been conducted over the past two years at University of Campinas with participation by Transpetro, the distribution branch of Brazil's state-owned oil firm, Petroleo Brasileiro SA (PBR).

About 20% of the BRL20 billion per year will be needed to invest in ethanol infrastructure, such as warehouses, ethanol-dedicated pipes and improvements in ports, he said.

The rest will be needed to construct new mills as well as to purchase industrial and agricultural equipment, Cortez said. The amount doesn't include the investments needed to ramp up agricultural production, however.

If such investments occur, Brazil could be able to boost its ethanol exports to 200 billion liters by 2025 from roughly 3.4 billion liters in 2006, the study said. However, the country's planted area for sugarcane - currently at 5.4 million hectares for sugar and ethanol output - will need to expand to a hefty 30 million hectares.

These studies don't account for the possibility of converting excess sugarcane mass, or bagasse, into ethanol via new cellulosic technologies - a technological breakthrough expected in coming years that may allow Brazil's planted area to grow at a less-rapid rate, said Cortez.

However, Brazil currently has some 200 million hectares of degraded pastures, where agricultural crops can be planted without knocking down a single Amazon tree.

The majority of the BRL20 billion in investments would have to come from private companies and investors, with the rest coming from Brazil's state-owned development bank, BNDES. Brazil is the world's No. 1 sugar producer and exporter. It is also the world's No. 2 ethanol producer after the U.S., but No. 1 ethanol exporter.

Follow what's happening in the Brazilian ethanol market on Ethablog, the only blog in English dedicated to Brazilian ethanol.

THE NEW YORK TIMES FLASHES CORNY HUMOR

The status quo cannot change without the mainstream media's contribution. The cartoon above, from the Sunday, February 11th, 2007 edition of The New York Times, signals that things are starting to trickle down into the general public's awareness.

Follow what's happening in the Brazilian ethanol market on Ethablog, the only blog in English dedicated to Brazilian ethanol.

WHAT JUAN VALDEZ HAS TO TEACH BRAZILIANS ABOUT ETHANOL BIOFUEL

Until the late 1950s, Brazil was arguably best-known for its coffee. The country had just won its first World Cup in 1958, in Sweden, so Brazil didn’t really figure on the global radar screen as a soccer powerhouse (the country has since gone on to win four more editions of FIFA’s world cup).

Carmen Miranda had made several appearances in Hollywood movies in the 1940s and 50s, with her tutti-frutti hat and faux-samba demeanor contributing, perhaps fatally, to building a Banana Republic image that Brazil still hasn’t shaken off entirely.

So coffee and the awe-inspiring natural beauty of Rio de Janeiro were basically all that existed, regarding Brazil, in the global consciousness.

Then, in 1959, legendary advertising agency Doyle Dane Bernbach came along and changed that. Hired by the National Federation of Coffee Growers of Colombia, they concocted a fictional personage called “Juan Valdez”, who, along with his little mule Conchita, came to symbolize quality coffee in the minds of Americans and Europeans alike.

With Colombian coffee at the top of everybody’s mind, selling the product became more and more difficult for Brazilian coffee growers, and the industry in Brazil suffered considerably over the coming decades.

Today Brazil is at risk of losing the lead in the biofuels race. A diminishing number of people around the globe recognize Brazil as the only successful biofuels experience in the world.

Ernst & Young, for example, has published an impossibly insulting “Renewable Fuels Index”, in which Brazil does not even figure among the top twenty players, lagging behind such alternative energy powerhouses as Portugal, Ireland, and Austria.

Never one to pass up a buck handed out by the American taxpayer, Ernst & Young has placed the U.S. squarely at the top of the list – numero uno, cream of the crop.

Quite literally so – they explicitly state President Bush’s State of the Union address last January as a determining factor in its evaluation. In that speech, of course, the Administration committed itself to continuing to finance the corn ethanol business in the U.S. by handing the corn lobby and Big Agribusiness generous tax breaks and subsidies, while penalizing ethanol-producing countries with a 54-cent-per-gallon tariff.

Brazil should not give up its position as the largest, most enduring, most successful biofuels experience in the world to companies with a veiled interest in making it appear that the race has just begun.

It hasn’t. It started 32 years ago in a semi-developed tropical country. While big multinationals will always have the incentive to play to their countries of origin, many of them, such as Madison Avenue's PR and advertising agencies, can be used by Brazil to publicize both its past and present experiences.

Just ask Juan Valdez.

Follow what's happening in the Brazilian ethanol market on Ethablog, the only blog in English dedicated to Brazilian ethanol.

BIRTH OF THE ETHANOL INDUSTRY: MISPERCEPTIONS AND CRYING OUT LOUD

When I talk of "birth of the ethanol industry", I'm talking about the industry in the U.S., of course. In Brazil, the industry was born over thirty years ago, which makes it old enough to teach a thing or two to its American counterpart.

As a Brazilian-American who spent most of his life in Brazil and just recently moved to Michigan, it simply awes me that Americans choose to overlook the experience that has been going on, for decades, right across the little Caribbean pond.

To make a long story short, here are the most common misperceptions I encounter:

Myth # 1: The U.S. must find an alternative to oil - and that alternative must, by all means, be found in the U.S. itself.

President Bush, using the extraordinary wealth of knowledge that he has amassed over his adult life as a Texas oilman, stated in his January 2006 State of the Union Address that "America is addicted to oil".

However, there is absolutely nothing that supports going from the idea of reducing dependence on Middle East oil to developing homegrown solutions.

The real need is to (a) stop funding regimes hostile to U.S. interests, by developing other sources of energy and (b) find an alternative to fossil fuels before they become very scarce and impossibly hard to extract.

Producing ethanol in tropical regions, where any feedstock, be it sugarcane, corn, or switchgrass, grows more abundantly simply because there is more sunlight, and subsequently shipping it to the U.S., is a solution that meets both of the requirements laid out in points (a) and (b) above. It is, unfortunately, a way forward that rarely occurs to the average American, who has come to equate ethanol with the highly inefficient corn.

Myth # 2: Producers and distributors have to be one and the same.

Not true! American companies whose core competence is distribution could profit handsomely if they simply imported the ethanol from countries that are better-qualified to produce it and then focused on the logistical aspects of getting the fuel to market.

If one examines the oil industry, one finds that there are myriad companies in countless subsegments of the market. That will be the case with ethanol in the future, as the market for ethanol, or gasoline blended with ethanol, develops further. Meanwhile, it is quite painful to see farmers worried about transportation logistics - farmers farm, refiners refine, blenders blend, and transportation companies carry things over long distances. A coherent energy policy from Washington will recognize this and set up the appropriate incentives to get things moving along.

But how to design a whole industry from scratch? Well, going down to Brazil and seeing what they did 32 years ago would be an obvious solution. They did pull it off in the 1970s - and, remember, we are talking about a country where the per capita income is much lower than that in the U.S., meaning that it was much riskier for Brazilian drivers to make the switch.

Myth # 3: Trading dependence on Middle Eastern oil for "dependence" on Brazilian ethanol would be a poor deal.

While oil fields obviously cannot be moved from one country to another, sugarcane plantations can. In fact, they can be started in almost any part of the tropical world. Brazil has stated time and again that it is willing to transfer technology to other tropical countries, to mitigate the risk inherent to having too much of the U.S.'s energy supply coming from a single country. In short, this technology transfer is in Brazil's own best interest, as Brazilian government officials have made abundantly clear.

But can Brazilian sugarcane plantations really be expanded? Well, today they cover 25,000 sq. km. of Brazil's territory - and Brazil has a total territory of over 8.5 million sq. km.

But what about the Amazon forest? While conservation is a legitimate issue, the bottom line is that the soil and climate in the Amazon region do not lend themselves at all to planting sugarcane. But there are other environmental concerns that have to be addressed. Given the proper capital infusions, they will.

So the whole problem boils down to the tariff on Brazilian ethanol. The government currently charges 54 cents on every gallon of Brazilian ethanol imported into the country, at the behest of the American corn growers. This tariff keeps investments away from Brazil, which is then unable to expand its ethanol-production capacities at the required rate. As a steady supply of ethanol cannot be guaranteed to U.S. buyers, changes to the fueling infrastructure in the U.S. aren't carried out. Because there is no infrastructure (e.g., ethanol pumps at fueling stations), there is no demand.

The knot, then, begins to unravel with the elimination of the tariff.

Follow what's happening in the Brazilian ethanol market on Ethablog, the only blog in English dedicated to Brazilian ethanol.

WASHINGTON POST: U.S. SEEKS PARTNERSHIP WITH BRAZIL ON ETHANOL

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Countering Oil-Rich Venezuela Is Part of Aim

My comments on the piece below:

Well, so the U.S. wants to partner up with Brazil, its good hemispheric buddy, to capitalize on Brazil’s 32 years of experience with ethanol and jumpstart its own biofuels industry.

And the American government can think of no better way to do that than by upholding the 54-cent-per-gallon tariff on Brazilian ethanol – which is, it should be noted, substantially higher than the zero-cent-per-gallon tariff on Saudi oil.

The Americans are not the only ones seeking to establish strategic partnerships with Brazil. India, China, and several members of the European Union have been busy snapping up land and property in Brazil over the past couple of years, while Washington caters to its corn constituents in Iowa.

I have recently become a defender of the tariff in the U.S. – let the corn growers lobby Congress and other pertinent political personae to have ethanol pumps at service stations around the country. That will certainly create the demand for ethanol, or gasoline blended with ethanol.

Once the demand is created, the corn growers will not be able to meet it and the U.S. government will, alas, have to abolish the tariff on Brazilian ethanol, wiping out the corn growers in the U.S. who did all the heavy lifting to begin with.

But, hey, who said it’s a fair world? Perhaps the Midwest could go down to Brazil and film a documentary on how the country has been using sugarcane to produce ethanol for the past 32 years.

Then it could show the movie at select movie theatres around the country, drawing huge crowds, and selling their produce for what it is best suited – popcorn.

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By Monte Reel

Washington Post Foreign Service

Thursday, February 8, 2007; A14

SAO PAULO, Brazil, Feb. 7 -- The United States and Brazil, the two largest biofuel producers in the world, are meeting this week to discuss a new energy partnership that they hope will encourage ethanol use throughout Latin America and that U.S. officials hope will diminish the regional influence of oil-rich Venezuela.

U.S. officials said they expect to sign accords within a year that would promote technology-sharing with Brazil and encourage more Latin American neighbors to become biofuel producers and consumers.

The United States and Brazil together produce about 70 percent of the world's ethanol, a fuel that President Bush has called a cornerstone in reducing U.S. dependence on oil.

"It's clearly in our interests -- Brazil's and the United States's -- that we expand the global market for biofuels, particularly ethanol, and that it become a global commodity of sorts," said R. Nicholas Burns, the U.S. undersecretary of state, who led discussions with Brazilian government officials on Wednesday.

For the United States, the initiative is more than purely economic. Venezuelan President Hugo Chávez has exploited regional frustrations with the market-driven economic prescriptions that the United States has promoted throughout the region for years, and he has used oil revenue to promote several regional economic alliances.

Burns declared that biofuel is now the "symbolic centerpiece" of U.S. relations with Brazil, a country that U.S. officials have long hoped could counteract Venezuela's regional anti-American influence.

"Energy has tended to distort the power of some of the states we find to be negative in the world -- Venezuela, Iran -- and so the more we can diversify our energy sources and depend less on oil, the better off we will be," Burns said at a news conference in Sao Paulo.

Brazil, the world's largest exporter of ethanol, has been a leader in biofuel technology after its government invested heavily in the ethanol industry in the 1970s. Its sugar cane-based ethanol is more efficient to produce than the corn-based fuel made in the United States. To date, ethanol has replaced about 40 percent of Brazil's non-diesel gasoline consumption. More than 70 percent of the vehicles now sold in Brazil are flex-fuel models that run on either ethanol or gas, and the number continues to increase.

Although the United States has surpassed Brazil in the total amount of ethanol produced, its producers cannot keep up with surging demand. Last year, the United States produced about 4.9 billion gallons and imported an additional 1.7 billion gallons, mostly from Brazil.

U.S. production is expected to sharply increase as new production facilities are finished this year, but demand is expected to surge as well. Bush has called for a 20 percent reduction in gasoline consumption by 2017, which would require an estimated 35 billion gallons of alternative fuels to bridge the gap.

The United States currently places a 54-cent-a-gallon tariff on most imported ethanol. Brazilian producers have long labeled the tariff hypocritical, saying that it is exactly the kind of trade barrier that U.S. officials oppose in other countries.

"It's not about free trade, but fair trade," said Matt Hartwig, spokesman for the Renewable Fuels Association, a Washington-based lobbying group that says lifting the tariff would amount to the United States supporting Brazilian producers. "The tariff has never served as a barrier to entry. More than 400 million gallons of ethanol came in from Brazil alone last year -- straight from Sao Paulo to New York Harbor."

The tariff is unlikely to be lifted during the current talks. It expires in 2009, and many in the industry believe the government is unlikely to address the issue before a presidential election year.

"The administration has indicated it would support lifting the tariff, but I think the current inclination is to allow it to expire and have that discussion at a later date," said Brian Dean, head of the private Interamerican Ethanol Commission, which was created in December by then-Florida Gov. Jeb Bush (R) to encourage U.S. ethanol partnerships with Brazil and other Latin American nations.

Brazilian industry leaders say the expanding demand for ethanol has resulted in a new understanding that Brazilian sugar growers and American corn growers are not competitors.

"Up to yesterday, we considered the U.S. corn growers our enemies, and they considered us their enemies," said Eduardo Pereira de Carvalho, president of Brazil's sugar cane growers union. "But we aren't enemies -- we're allies, independent of the tariff issue that has divided us. My government has said to me, 'Aren't you creating competition for us?' I say no."

If an agreement between the two countries is signed, both will likely share some of the technological advances each has been pursuing independently. The U.S. Energy Department last year opened two research centers to study how to better derive ethanol from cellulose material -- a development that could turn a wide variety of plants into fuel sources. Brazil, meanwhile, has been conducting similar research, and some in the industry believe pooling sources could lead to quicker breakthroughs.

But U.S. officials said the most valuable result of an alliance would be that it would encourage more countries to get involved in production and use of ethanol. This would create an internationally tradable commodity, much like oil is today, Burns said. That would lessen the power that oil has over the region, he said.

"If you boil down all the issues causing political instability in the region, many of them do come down to energy -- the expropriation of a petroleum company in Ecuador, Venezuela and its oil dominance, the nationalization of natural gas and other energy sources in Bolivia," said Dean, of the Interamerican Ethanol Commission. "So there clearly is a compelling need for an energy security regime."

According to Carvalho, the Brazilians are aware that such concerns -- particularly about Venezuela's oil influence -- have spurred talks of the ethanol partnership.

"Of that I have absolutely no doubt," he said.

Follow what's happening in the Brazilian ethanol market on Ethablog, the only blog in English dedicated to Brazilian ethanol.

HOW MUCH ARE REFINERIES IN BRAZIL REALLY WORTH?

That all depends on how much cane they process. Setting up the industrial facility is easy – getting a reliable supply of sugarcane to process into ethanol is the tricky part.

Several owners of refineries and farms have sent me descriptions of properties that are up for sale. Many of them are capable of processing around 1.2 million tons of sugarcane per year, meaning, they have both the equipment AND the agricultural capacity to grow 1.2 million tons every year.

A rough back-of-the-envelope calculation translates one ton of sugarcane into one barrel of equivalent oil. So 1.2 million tons of sugarcane/year means roughly 1.2 million barrels.

With oil going for US$60 a barrel, that is US$72 million/year.

Let us imagine costs at 50% of this amount. Net income, then, works out to $36/million per year.

As these farms are capable of producing ad perpetuum, their cash flows should be treated as a perpetuity. If one takes a discount rate of, say, 10%, the present value of this stream of cash flows works out to:

US$36 million/.10 = US$360 million.

The asking price submitted by the owners of most of these turn-key ethanol operations was significantly lower – between US$50 and 100 million.

I have advised them to hold on until rising oil prices put a real squeeze on buyers who are energy-intensive in their countries of origin. I reminded the sellers that there is nothing like a good old-fashioned oil shock to loosen the purse strings abroad.

As I said in my last post, time is on Brazil’s side.

PS: to readers who have emailed me regarding the basis for my assumption of costs, I used the following calculations: one liter of ethanol costs aproximately 25 cents to produce in Brazil. Counting 117.35 liters to the barrel, the total cost per barrel (COGS + Operating Expenses) is US$.25 * 117.35, which is equal to US$29.33. H.O.

Follow what's happening in the Brazilian ethanol market on Ethablog, the only blog in English dedicated to Brazilian ethanol.

BRAZIL TO DOUBLE ETHANOL EXPORTS - MINISTER

My comments on the piece below:

The Brazilian government is struggling to keep up with the surge in international interest in ethanol. Brasilia's efforts have been hampered by an industry that is famously ossified in its ways - many farms and distilleries belong to families that have been in the sugar and ethanol business for several decades, if not centuries.

Many are currently looking to cash in on their positions, putting up their properties for sale to foreigners. But there are very few, if any, brokers specialized in trading farms and ethanol-producing machinery. Farm owners in Brazil want their properties appraised by their potential to generate future cash flows - a figure which can be quite high, if one considers that ethanol, in terms of barrels of equivalent oil, has exactly the same value. And, at this point, they rightly feel that the only way for oil is up, as the 20% climb in prices over the past two weeks has made amusingly clear.

Investors coming from the outside, however, want to buy ethanol properties based on their historical value. They consult with a foreign bank in Sao Paulo or in their country of origin and are told that, if something was worth X just one year ago, it can't possibly be worth 10X today.

Well, yes, it can, because these properties will continue generating cash flows for a very, very long time. Depending on the variety, it takes sugarcane only one to one-and-a-half years to grow (or to "come onstream", to borrow terminology from the oil industry). After that, the same plant can be harvested up to five times, before it must be planted again.

So if farms and ethanol industrial equipment have suddenly taken on new-found popularity and are now in much greater demand, foreign investors must pay based on this new market reality. The supply curve of ethanol farms and distilleries is inelastic, even over a period of several years, while the demand curve has dramatically shifted outward.

So investors must value these properties based not on their historical value, as most urbanite bankers in Sao Paulo would have you believe, but based on farmers' subjective evaluation of what is going on.

It is important to remember that these farmers are people who have barely scraped by over the past centuries, many times looking starvation or bankruptcy in the face. They are accostumed to making decisions and forecasts based on little or no information at all about weather and market conditions.

Add to this that, while many of them have very large ethanol operations, they may not even possess an email address. Then one begins to get an idea of the hurdles facing foreigners looking to do business in Brazil.

In any negotiation, Brazilian farmers can wait. Time is on their side.
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Reuters, 05/02/2007.

Thanks to Ethanol Brasil

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Brazil hopes to double its ethanol exports by 2010 to meet growing demand for the alternative fuel, largely from Japan and Sweden, Finance Minister Guido Mantega was quoted as telling the Times newspaper in an interview.

He also urged Britain to use more ethanol as part of the fight against global warming, according to the British daily.

Brazil aimed to increase its ethanol exports to $1.3 billion in 2010 from $600 million in 2005, largely due to agreements signed with Tokyo and Stockholm, Mantega was quoted as saying in comments published on Monday.

"We would like the majority of countries to adopt these alternative sources of energy and fuel," he told the Times.

"In the UK ... it's possible to give more importance to ethanol. We can develop joint projects in such a way that we can introduce these alternative energy sources into regular consumption here," Mantega said, speaking on a trip to London.

Brazil, the world's biggest ethanol exporter, started to develop ethanol production from sugar cane in the 1970s.

Mantega said he hoped the latest round of world trade talks would help open the U.S. market to Brazil's ethanol.

"Our costs are 50 percent lower and the quality of the energy source is higher than the ethanol made from corn (maize) in America. So we can have more co-operation with America if they open the possibility for more imports from Brazil of ethanol and other agricultural products," Mantega said.

He also touched on the importance of protecting Brazil's Amazon forest, the largest rainforest that has been called the lungs of the world. "If other countries want to keep an atmosphere that has less pollution, these countries should help Brazil with material resources in such a way that we could have much more rigorous surveillance.

As for Brazil's economy, Mantega said the country was set to experience an economic growth rate of between 4.5 percent and 5 percent in the coming years, according to the Times.

Follow what's happening in the Brazilian ethanol market on Ethablog, the only blog in English dedicated to Brazilian ethanol.