Most of our sugarcane mills have the capability to switch production between sugar and ethanol. The market for each of these products is compelling. Global sugar demand is projected to grow steadily, and Brazil, as the world’s low-cost producer, is well-positioned to supply a significant share of this demand (Figure 4). The same economics should make Brazil a leading global supplier of sugarcane-based ethanol as trade in this product increases. The domestic market for ethanol is large and is forecast to grow as more Brazilians choose flex-fuel cars (Figure 5).
As the sugarcane industry expands to meet this demand, it will also become a larger supplier of electricity to Brazil’s power grid through cogeneration capabilities at mills. These sales will become a meaningful – and stable – part of the revenue stream for mills. Cogeneration could account for over 15 percent of an average mill’s revenue by 2015, according to UNICA, the Brazilian sugarcane industry association.