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Latin American Economy & Business - April 2013 (ISSN 1741-7430)

ETHANOL: Rousseff government offers sweeteners to Brazilian producers

Brazil’s sugar-based ethanol sector is finally getting a chance to reclaim the market it once had in Brazil and abroad. A new government incentive package, announced on April 23, is expected to provide better conditions for local producers to increase their output, in the hope of allowing Brazil to reduce its imports of fossil fuels. The package involves tax breaks and cheaper credit for producers, who have struggled, particularly since 2008, with high indebtedness that has reduced their investment capacity and led to lower production, and consequentially higher prices. Government subsidies since 2008 for gasoline distribution further hindered the ethanol industry.

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