The Brazilian Dominance

Brazil is a natural leader in the sugar and ethanol sector and is in a unique position to capture the future upside on the global markets.

It is expected that Brazil will continue to be the most competitive country in the global sugar and ethanol sector, as the many factors that brought it to this position will continue to apply:

• Brazil has the lowest production cost in the world in both sugar and ethanol due to adequate weather and soil conditions; agricultural and industrial productivity improvements; leading technology with flexibility to easily switch between the production of sugar and ethanol; a tradition of more than 400 years of sugarcane harvesting; and the foresight to invest early in ethanol. Brazil´s sugar production costs are half of those of the US and almost one-fourth of EU levels.

• Brazil has available land to expand production without damaging environmental sensitive areas. In 2006, sugar cane cultivated areas accounted for less than 2% of the total land available for agriculture and pasture in Brazil.

• Brazil has a successful story of using ethanol to substitute gasoline that led to the first large scale production and sale of flex-fuel vehicles that can either run on gasoline or ethanol.