Brazil's leading exporter of ethanol and a Key to Investing Company

Brazil's largest exporter of ethanol and a key company to invest

During the seminar on energy organized in Vienna by the Organization of Petroleum Exporting Countries (OPEC), the Brazilian Minister of Mines and Energy, Edison Lobao said Brazil will increase its ethanol production by 150% to 64,000 million liters by 2017 and becoming the leading exporter of ethanol, leaving the United States in second place. "The Brazilian ethanol production will grow 150% from 25,000 million liters in 2008 to 64,000 million liters in 2017," Lobao said. Brazil are expected in energy investments to U.S. $ 352,000 million, investment in biofuels June 1 , 5% of that total. Brazil "includes energy investments of $ 352,000 million, 146,000 million in the oil and natural gas, 83,000 million in electricity and finally 23,000 million in biofuels," Lobao said.

"In 2017, Brazil plan to export 8,000 million liters of ethanol, against 5,000 million in 2008, becoming the largest exporter of ethanol in the world." At a time when oil prices climbed to U.S. $ 143, biofuels climbed in popularity as an alternative to fossil fuels. But otherwise the voices came from the hand of social unrest in countries where maize is the staple food for the population as in Mexico, and many warned that the production of corn-based ethanol will jeopardize the use of this crop as food in addition to the higher prices resulting from increased demand. But Brazilian ethanol does not jeopardize food mundial.El country is the largest producer of ethanol from other crops, sugar cane, and does not compete with food production, as it stems less than 1% of the area total cultivated for her. "The amount of land used for growing sugar cane (raw material for Brazilian ethanol) is 0.8% of total land area, or less than 2% of its cultivated area. Production of (biofuels) in Brazil is far from compete with food production, "said the minister in Vienna.

How can we accompany the increase in the production of this biofuel investing in the stock market? There is a company that clearly will benefit from these strong recovery prospects of ethanol production, and is obviously Brazilian. The company is Cosan (BVSP: CSAN3, NYSE: CZZ) and is one of the largest producers of ethanol and sugar, and the largest producer of sugar and ethanol in Brazil. During the last harvest, in 2007/08, had an area of ​​605,000 hectares under cultivation, sugar production was 3.15 million tons and its ethanol production of 1,570 million liters. The interesting thing is that Brazil has two different harvest periods: the north and northeast harvest from November to April and the center-south from May to October, creating a continuous production of sugar cane. Brazil Cosan Group last year bought the distribution and marketing of fuels and lubricants Esso in Brazil for U.S. $ 826 million. "The acquisition of Cosan ensure a leadership position in growing markets and distribution of ethanol fuel in Brazil," the company said. Better information? Cosan has just been rated "underperform" by Bank of America, because they might have to sell new shares to finance after the acquisition of Nova America SA Agroenergia, debt and take it as part payment for the compra.Además, the questioned rating agency Standard & Poor's could lower the rating of BB-, according to Bloomberg.

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