Ethanol will benefit by the summit of the G7?
The summit of the most industrialized countries of the world, G7, which ended on Monday (08/06), set the goal to stop, or greatly reduce, the use of fossil fuels until 2100.
While the definition sounds more like intention of government supporters, who are preparing for the Summit of Climate of Paris, this December, it is committed against fossils, including oil.
The commitment of the G7 opens up opportunities for Brazilian ethanol?
In the following interview, Jucelino Sousa, president of Coruripe Group, with unit in Alagoas and four in Minas Gerais, answers questions about the subject to the JornalCana portal. Check out:
JornalCana - How do you believe that the sugarcane industry should take the opportunity opened by the commitment of the G7?
Jucelino – Environmental issues lost ground on the agendas of governments since the crisis of 2008 and more recently due to the oil price fall. Unfortunately the short-term view has excelled. For the sugarcane industry take advantage of the resumption of the environmental agenda, it would be necessary that the Brazilian government was engaged in this cause. It’s not what we see. At this time, the Government is not with the environment and much less concerned about the sector. So much so that in the last four years has subsidized fossil fuels in the country. It means, I don’t see how institutionally and without the support of the Federal Government avail ourselves of this movement.
JornalCana - The Climate Summit in Paris, next December, will be the next step on the topic. How the sector should participate in this event?
Jucelino – The Brazilian experience of replacing fossil fuels by renewable fuels and power generation by biomass is by far the most successful in the world. We have a diverse and sustainable energy matrix. The Brazilian Government, with the support of industry, should seize this moment to show it to the world. Much more than being the country of Samba or of Soccer, we really are the country of renewable fuels without damages to the production of food. The Government needs again to buy that idea and use this flag in its foreign trade policy.
JornalCana - The possible opening of the world market for biofuels, including ethanol, is already a reason to resume investments in the sector? How?
Jucelino – Unfortunately not. The industry will expect, will want to see to believe. He believed this in the past and so it is in this fragile situation, the industry invested and was abandoned, and will not repeat the same mistake. The industry must first equate their debts to capitalize, to restructure and only then think about going back to grow. The increase in the ethanol consumption and increasing the mixing of the anhydrous were offset by decline of consumption of the Otto Cycle fuel. The high inventory of ethanol passage and the delicate financial situation of the sector, avoided and still preventing the recovery of ethanol prices in the mills.
JornalCana – And the sugar?
Jucelino – The fall in sugar prices in New York offset the rise in the exchange rate, and we still have a huge stock of sugar in the world that will take several years to be solved. The Free energy prices were reduced by decree. In short, we had no help on the revenue side. On the other hand, we had increased diesel, salary increases, impact of exchange rates on fertilizers and pesticides, rising interest rates and the amount of the debt in R$ which had been contracted in US dollars.
JornalCana - Tell me more about that.
Jucelino – Completing the picture, the sector faces enormous constraints of credit lines from private banks and public banks. How to think about investments with such a scenario? The focus today in our company and in all other industry I have spoken is the cost savings and increased productivity, the goal is just one: to produce more with less, using the same installed capacity.