The only thing holding up investment in ethanol production elsewhere is uncertainty about which way the oil price will go -- and since that depends mainly on how much the Saudis decide to pump, the price could easily lapse right back, as it has done in the past.
"In the past 18 months, sugar's future prospects have taken a dramatic turn for the better. Ironically, high oil prices – which have also pushed up canegrowers' and millers' costs – have been a major catalyst.
Brazil, the world's biggest sugar exporter – which in the early years of this decade was able to make a living at prices that all but brought Australian producers to their knees, because of its efficiency, low labor costs and a very low currency – has begun to divert much more of its sugar crop than in the past to ethanol production.
Brazilian sales of so-called "flex-fuel" cars, which can run on any blend of ethanol and petrol, and even 100 per cent ethanol, have soared this year. Ethanol gives somewhat less mileage to the litre but costs about half the price of petrol, and Brazilian car makers have taken to flex-fuel vehicles with gusto.
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