Showing posts with label biofuel. Show all posts
Showing posts with label biofuel. Show all posts

Saturday, October 9, 2010

Minister mulls using excess maize for biofuel

SA needs to re-examine its current policy on biofuels which would see the country use its excess maize without threatening food security, Agriculture Minister Tina Joemat-Pettersson said on Friday.

"It is not only about food production. It is also about energy, development and saving and therefore with the excessive maize surplus, we as a government need to look again at our biofuels policy," she told delegates at the annual AgriSA Congress in Johannesburg.

The country needed to find new markets and opportunities for its agriculture products.

She cautioned that her department alone did not determine the country's biofuel policy.

A national biofuel policy, drawn up in conjunction with commercial farmers, was needed to ensure food security was not threatened.

The Democratic Alliance's deputy energy spokesperson David Ross welcomed Joemat-Pettersson's comments.

"[She] is to be commended for putting aside party differences and moving her department towards the adoption of DA proposals for an end to the ban on South Africa's maize being sold for ethanol production," he said.

The minister told delegates commercial farmers were not the enemies of the African National Congress, but were considered necessary for the country's future prosperity.

She said at the recent ANC's national general council in Durban it had been accepted that commercial agriculture had an important role to play.

"It is the first time in the history of the ANC that the words commercial farmers were not used as a swear word. It was a big breakthrough. It was the first time in the history of the ANC that [farmers] were not seen as the enemy of South Africa, but that commercial farmers are the cornerstone of rural development."

She said the media had focused so much on ANC Youth League leader Julius Malema that it had missed the NGC's "absolute horror and disgust" at the ongoing farm murders.

She told delegates that "expressions made by individuals" didn't necessarily echo ANC policies.


"My role is to speak for all farmers at all levels, not just the small farmers. It is a very difficult task. It is the first time that we accept that ANC politicians also speak on behalf of commercial farmers. That is a huge change that has taken place in our country."

She said she had informed ANC leaders in Durban of the difficulties faced by commercial farmers.

While she would on occasion have differences with farmers, Joemat-Pettersson promised to speak to them before going public with her differences.

Problems facing the agriculture sector included production costs and the strengthening rand. It could only meet the country's future food requirements if energy and electricity problems were properly addressed.

The energy affairs department had recently made efforts, with the assistance of Agri SA, to keep recent diesel price hikes to a minimum.

The minister said her office was forging ahead with the re-establishment of agricultural colleges to train aspiring farmers. - Sapa

Friday, October 8, 2010

Ethanol Futures Surge Most in Five Years on Lower Corn Yields

Ethanol futures surged the most in more than five years in Chicago after a government report forecast corn supplies will be lower than an earlier estimate, signaling higher costs for plants that make the biofuel. 

Futures climbed after the U.S. Agriculture Department estimated the domestic corn crop will fall 3.4 percent from a year earlier, the second reduction to its forecast in as many months. The grain is the primary ingredient used to make ethanol in the U.S. 

“The big story is a very bullish grain report,” said Dan Flynn, a trader at PFG Best in Chicago. “The profit margin to make ethanol is going to go up because it costs more to make it.”

Denatured ethanol for November delivery advanced 19.6 cents, or 9.9 percent, to settle at $2.184 a gallon on the Chicago Board of Trade, the highest price since Sept. 30, 2008. The percentage increase was the biggest one-day gain since September 2005. Futures have followed the price direction of corn in 15 of the past 16 sessions.

Corn production will total 12.664 billion bushels, down from 13.16 billion projected a month ago and less than last year’s record 13.11 billion, the U.S. Agriculture Department said today in a report. The average estimate of 26 analysts surveyed by Bloomberg News was for 12.977 billion bushels.

Corn for December delivery rose the exchange limit 30 cents, or 6 percent, to $5.2825 a bushel in Chicago. One bushel of the grain distills into about 2.75 gallons of ethanol.
‘Driving Force’

The corn report “will be a driving force” in the ethanol market over the next few trading sessions, Flynn said.

“There’s no way they would sell ethanol with corn at these prices sub-$2,” said Jason Ward, an analyst at Northstar Commodity Investments LLC in Minneapolis. “I wouldn’t. Based on corn prices you’d lose money if you did. That’s why it’s so critical for the end-user to be awake.”

In cash market trading, ethanol in Chicago gained 14.5 cents, or 7 percent, to $2.225 a gallon and in New York the biofuel jumped 13.5 cents, or 6.2 percent, to $2.315, according to data compiled by Bloomberg.

Ethanol on the West Coast increased 11.5 cents, or 5.2 percent, to $2.315 a gallon and in the U.S. Gulf the additive gained 9.5 cents, or 4.3 percent, to $2.30.

With ethanol at these prices, producers should buy corn right now to lock in margins and hedge against corn prices going higher over the next several days, Ward said.

Volatile corn prices and bad bets on the grain contributed to the bankruptcy of at least a dozen ethanol producers over an 18-month stretch that started in October 2008, which included VeraSun Energy Corp., once the largest American distiller.

Poet LLC, in Sioux Falls, South Dakota, is the largest U.S. ethanol maker, followed by Archer Daniels Midland Co., in Decatur, Illinois, and Valero Energy Corp. in San Antonio.
To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.

Thursday, October 7, 2010

India Set To Resume Sales Of Green Fuel After Two Years - Industry Officials

India is set to resume sales of gasoline blended with ethanol after a two-year gap, with sugar mills offering supplies after a sharp rise in state-fixed prices of the biofuel, industry officials said.
State-run oil companies recently accepted about 710 million liters of ethanol from local companies after inviting supplies of 1.05 billion liters, a senior official with the Indian Sugar Mills Association said.
"The supplies will probably start from the middle of next month," said the official, who didn't want to be identified.
State-run oil companies have been deluged with offers of ethanol from local sugar mills after the government revised the state-fixed price of the green fuel to INR27 per liter (0.26 gallons) from INR19.50 following a decision by India's Cabinet Committee on Economic Affairs in August.
There has been almost no ethanol blending for nearly two years, despite government orders for a mandatory 5% ethanol blending with gasoline, due to a lack of availability and the low state-fixed ethanol price.
Unlike in many other countries, ethanol is produced in India from molasses, a byproduct of sugar, rather than sugarcane juice or other food crops such as corn. Over the past two years, however, many manufacturers preferred to use molasses to produce rectified spirit and industrial chemicals due to the low price of ethanol.
Cane output also fell in the world's second-largest producer due to adverse weather, which also contributed to the drop in supply. India's sugarcane output is expected to rise about 17% to 324.91 million tons in the marketing year that started Oct. 1, which will help supplies of the fuel.
"We are ready and only nitty gritties are being sorted out. Price is no more an issue," said Prakash Naiknavare, managing director of the Maharashtra Federation of Cooperative Sugar Factories Association. "The program (for the sale of blended fuels) is now very much on."
India's largest sugarcane-producing state, Uttar Pradesh, will supply about 310 million liters of ethanol out of the total quantity asked for by state-run oil companies. Maharashtra, the country's second-largest sugarcane-producing, state, will supply 186 million liters, sugar industry officials said.
The country launched blending of ethanol with gasoline in 2006 with the aim of cutting fuel import bills as well as increasing fuel efficiency and improving the environment, but supplies under the program remained erratic