World Grain - February 2011 - 88

BIOFUELS QUARTERLY

Biofuels News Review
GRFA: biofuels can ease impact of oil prices
TORONTO, ONTARIO, CANADA — Following several reports that the price of oil is expected to spike, the Global Renewable Fuels Alliance (GRFA) reiterated on Jan. 7 that biofuels are the best way to reduce reliance on conventional oil. The International Energy Agency (IEA) said recently that high oil prices pose a threat to the stability of an already fragile recovering global economy. The IEA went on to recommend that oil-consuming countries boost efforts to cut back on oil usage. “These sky-rocketing crude oil prices are already having an impact on other commodity prices and food inﬂation,” said Bliss Baker, spokesperson for the GRFA. “The IEA’s warnings should be a wakeup call to all countries to reduce our crippling reliance on crude oil. The E.U.’s oil imports alone grew by $70 billion last year.” The UN Food and Agricultural Organization (FAO) also announced recently that the Food Price Index has surpassed 2008 levels driven in large part by the increase in world energy prices. A report by the U.K.’s Department of Environment, Food and Rural Affairs in 2008 concluded that crude oil prices were a major factor behind the food price spikes. The report said, “The rapid increase in global energy prices increased the cost of agricultural inputs, especially fertilizers, so increasing the cost-base of agricultural producers, particularly in the cereals and oilseeds sector.” “The GRFA issued its own warning with regards to rising oil prices and its effect on food in September 2010. This latest IEA warning and FAO report should encourage us all to reduce our reliance on oil,” Baker said. “These food price spikes will continue unless we make concerted efforts to develop alternatives to crude oil like ethanol and biodiesel.” In 2008, biofuels were blamed for commodity price spikes and resulting food riots. GRFA said these allegations have since been proven wrong in a number of signiﬁcant reports published by the World Bank, the U.K.’s Department of Environment, Food and Rural Affairs and the U.S. Congressional Budget Ofﬁce. A September 2010 report by the UN FAO has suggested that “increased demand for biofuels will help revitalize the worldwide agricultural sector without putting our secure food supply in jeopardy.” “The GRFA has long advocated that biofuels are the best way to reduce our reliance on conventional oil. Even OPEC said in a recent forecast that ‘energy efﬁciency policies along with the use of biofuel will put downward pressure on oil consumption worldwide.’ As we have seen today from the IEA warnings and the UN FAO report, we are increasingly vulnerable to soaring crude oil prices,” said Baker.

U.S. ethanol exports up, DDGS exports down
WASHINGTON, D.C., U.S. — U.S. exports of non-beverage ethanol were up 11% in November, according to newly released data analyzed by the Renewable Fuels Association (RFA). Total exports reached 38.9 million gallons in November, the third-highest in 2010. Between January and November 2010, U.S. ethanol exports totaled 324.9 million gallons, nearly a three-fold increase over 2009 total exports. Through November, the industry was on pace to export more than 350 million gallons in 2010. These exports are not eligible for the Volumetric Ethanol Excise Tax Credit (VEETC, or blender’s credit). Breaking it down further, exports of denatured ethanol totaled 26 million gallons in November, up 19% from October. Canada was the top destination of U.S. denatured ethanol exports, receiving 15.5 million gallons. November exports of undenatured (non-beverage) ethanol totaled 12.9 million gallons. On the co-products side, exports of distillers grains totaled 717,143 tonnes in November, down 7% from October. China was the top destination, followed by Mexico and Canada. Through November, U.S. producers had exported nearly 8.3 million tonnes of distillers grains to more than 50 countries. The industry was on pace to export approximately 9 million tonnes in 2010. Through November, 28% of total exports had gone to China, 18% had shipped to Mexico and 11% went to Canada.

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World Grain - February 2011

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