Brazil's ethanol boom is changing the global corn market

The rapid growth of corn ethanol production in Brazil is dramatically changing the country's domestic market, contributing to increased consumption and potentially limiting future exports.

 

According to AgWeb, citing Farmdoc daily, corn ethanol production has increased from 0.4 million tons in 2015/16 MY to 18.4 million tons in 2024/25 MY, using about 15% of the total corn harvest. Currently, 25 corn ethanol plants are already operating in the country, and 15 more are under construction.

 

Demand for ethanol continues to grow, and Brazilian authorities are considering increasing the proportion of ethanol in gasoline from the current 27% to 30%.

 

Against this background, corn exports may decline by 20% compared to the record level of 2023. This will also be partly contributed by a decrease in imports by China and an increase in production volumes in other countries - the USA, Argentina, and Ukraine.

 

The active development of the ethanol industry in Brazil, which consumes mainly the second crop of corn (safrinha), could sharply reduce the country's export potential, which would reduce competition on the world market for American corn and support world prices.