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SC Iowa |
U.S. ethanol producers plunge on worries over Brazilian imports
Sep 11 2014, 15:48 ET | By: Carl Surran, SA News Editor
Pacific Ethanol (PEIX -7%) and other U.S. ethanol producers are sharply lower, apparently on fears that the industry in America could be hit by a surge of Brazilian imports.
Brazil yesterday approved a tax credit for domestic ethanol exporters, which the government believes will help its domestic exporters "because it cheapens the Brazilian export and pays a devaluation of the exchange rate," the country's finance minister says.
Ethanol demand has fallen in Brazil in recent years, with only 25% of flex-fuel cars there using ethanol in 2013 vs. 82% in 2009, according to Bloomberg.
U.S. ethanol makers already have been pressured by the EPA's proposals to cut the amount of biofuels that refiners will be required to blend into gasoline, and moves by California regulators that have given Brazilian sugar ethanol a better greenhouse gas rating than corn-based ethanol produced in the U.S.
Ray J
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from below....question about why etoh stocks down..
