Ian Bicking: the old part of his blog

Re: On ethanol

Brazil uses ethanol production as a way of hedging its exposure to the sugar price. In times when the sugar price is low and the oil price is high, it diverts sugar cane into ethanol production and increases the amount of ethanol added to gasoline locally so that it needs to improt less oil. When the sugar price rises it sells more actual sugar and produces less ethanol.

Given that Brazil has such a large sugar crop, this is a very shrewd move on the part of its government.

Comment on On ethanol
by Sean Hunter