Daily Biofuels Summary for November 8: Food riots expand to Mauritania as corn, soy prices increase

Top Story:

In Mauritania, one person was killed and several injured when food riots broke out in several provinces. Protesters were demonstrating over rising food prices, and an 18-year old was shot in Kansoaa by security forces after protestors attempted to invade the home of a local official. The rise of food transport costs, associated with the increase in oil prices, and biofuel production were blamed for the price hikes.

Producer News:

In Oklahoma, Green Country Biodiesel in Chelsea filed for liquidation after Cargill cut off soybean oil deliveries after the company fell behind on payments.

International News:

In the UK, D1 Oils plc and Stiller Group completed a six-month test, running 19 Scania trucks for a million miles on soy-based B100 biodiesel. Results showed no change in engine or vehicle performance, and a minimal but undisclosed reduction in miles per gallon compared to petroleum diesel.

In Indonesia, a brochure released last week by the Indonesian Palm Oil Commission (IPOC) is being criticized for underestimating the impact of deforestation on greenhouse gas emissions. The brochure stated that oil palm plantations sequester more CO2 from the atmosphere than rainforest, by 25.71 tons per hectare per year compared to 9.62 tons per hectare per year. Meine van Noordwijk, Regional Coordinator for Southeast Asia and Principal Ecologist for the World Agroforestry Center (ICRAF) pointed out that, at the quoted differential, it would take an oil palm plantation  50-100 years before it made up for the emissions produced in deforestation, while the average life of a palm plantation is less than 25 years.

In Brazil, the Brazilian Institute of Geography and Statistics is forecasting a record 556.5 million ton sugar cane harvest. Production was 514.9 million tons this year. The agency said that sugar cane acreage would increase from 6.72 million hectares to 2.25 million.

In India, three sugar factories in Maharashtra will produce ‘bio-CNG’ (compressed natural gas) from sugarcane biomass. The German Investment and Development Company (DEG)will provide more than $20 million in financing. CNG is a popular motor fuel in India metropolitan areas. The Indians expect to increase the yield from sugar cane by up to 130 percent by producing bioCNG compared to sugarcane ethanol. Anaerobic digestion – the process used in bioCNG production – is a more efficient process than bioethanol conversion. Also, bioCNG can be produced from bagasse which is not currently the case for ethanol.

In Senegal, President Abdoulaye Wade pledged to cut the number of cabinet ministers and cut government salaries, as the country struggles with energy and food price increases.

In Belize, Merconsult S.A. (Panama) and Destillint SA de CV (Mexico) have formed a JV to acquire the idle Libertad Sugar Factory and produce ethanol.  Project investment is estimated at $25 million.

Research News:

Ethanol prices have resumed their recovery, reaching $1.84 per gallon after reaching a low of $1.51 in September.

In Chicago, soybean oil futures reached a 33-year-high of 44.20 cents per pound, after Brazilian production figures came in at the bottom end of expectations. Corn was up to $3.89 per bushel on expectations that the US Department of Agriculture would lower its harvest estimates, and strong export demand. Wheat fell 3 percent to $7.62, based on weak exports.

Policy and Policymakers:

In Washington, US Rep. Herseth Sandlin said that 35 mpg CAFE standards and a provision requiring utilities to generate 15 percent of their power from renewable sources is holding up the Energy Bill. Southern senators are objecting to the fact that nuclear and hydropower does not count towards the renewables target. “I’m sorry, we cannot use wind, we cannot use solar just because of where we are,” Sen. Bob Corker, R-Tenn., said. “If hydropower and nuclear were included, we could run the standard up to 40 percent or 50 percent.”

The Transatlantic Economic Council has its initial meeting today in Washington DC. The Council was formed earlier this year by German Chancellor Angela Merkel and US President George Bush to establish a ‘transatlantic single market’. The Council is expected to define a common technical standard for ethanol and biodiesel in this first meeting.

Consumer and Fleet News:

In Maryland, state highway officials said that they would convert snowplows to a B5 blend this season, and expect to convert their equipment to B20 in 2008-09.

Financial News:

The Biofuels Digest Indexâ„¢, a basket of public stocks, rose 1.79 percent to a 52-week high to 108.11 as large-caps continue a strong run over the past month. Archer-Daniels-Midland (ADM) rose 2.17 percent to $37.26, and The Andersons (ANDE) rose 1.47 percent to $42.71. The mid-cap pure-play ethanol stocks fell between 1 and 2 percent.

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