Lack of investment seen to cause ethanol shortages in Brazil

Brazil which is the world’s largest producer of sugarcane, is expected to  continue to experience shortages of ethanol for several years.  This is due to a lack of investment in new planting of sugarcane, which is used as a feedstock for producing ethanol fuel.  The government of Brazil is looking at putting in place regulations to protect the ethanol industry, but this may not be enough.    The government is expected to implement regulations in July which will require producers and distributors to set one-year supply contracts, in an effort to curb shortages.  Ricardo Dornelles, director of renewable fuels at the energy ministry, said, “Cane supply is fixed in the short term.  For ethanol demand to be met we are going to have to curb it or we could run into a shortage.” (June 8, 2011)