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Home >> Business
UPDATED: 13:03, June 06, 2007
Soros invests 900 million dollars in Brazil's ethanol, calls for lower tariffs
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International stock investor George Soros said on Tuesday that he had invested 900 million U.S. dollars in Brazil's ethanol production and will continue to invest, but he warned that demand may not keep up with the expansion of the production unless the international market opens fairly to Brazil's ethanol.

At the Sao Paulo Ethanol Summit 2007, organized by the Union of Sugarcane Industries (Unica), the billionaire admitted being a "speculator", who is currently speculating on Brazil's ethanol industry. He has joined the 900-million-dollar plan to buy sugarcane land and build ethanol distilleries in western Brazil.

Regardless of the potential market risks, Soros said ethanol is "competitive with gasoline" as it's much more environment-friendly, and that he plans to continue investing in its production.

Brazil could increase its ethanol production ten-fold, but there are problems to overcome, Soros said. The Brazilian market for ethanol is almost saturated, so exports are essential for industry growth. But trade barriers from other countries dampen exports, the investor said.

The United States and the European Union levy high tariffs on Brazil's ethanol, which makes it expensive. The question is "how to open up the market in the USA, Europe and Japan," and how "to create an environment with stable prices," Soros said.

He believes that politicians in the United States and Europe will eventually reduce or eliminate the tariffs that make Brazilian ethanol exports expensive as the world turns increasingly to biofuels over fossil fuels.

Brazil is the second-largest producer of ethanol in the world after the United States, but is the No. 1 exporter. Its production from sugarcane is considered more efficient than the U.S. production by corn.

Source: Xinhua

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