Higher prices of corn are natural during harvesting periods but strong demand of corn supplies from ethanol manufacturers have contributed to a considerable rise in prices.
Higher prices of corn are natural during harvesting periods but strong demand of corn supplies from ethanol manufacturers have contributed to a considerable rise in prices. December (2005) corn prices at Chicago board reached US$ 2.75 1/2 on October 10 2006.
Ron Plain, Missouri University's agricultural economist said, hog producers believe increased production of ethanol means much higher prices of corn in future, which has been a major reason for slow expansion in 'sow herd'.
This price hike has led biofuel makers to look forward for other alternatives. For instance, largest ethanol producer in US, Archer Daniels Midland (ADM) Corporation is looking at cornhusks & cellulosic material to meet increasing demands for biofuel though it says that soybean & corn will continue to be the key essentials for US biofuel market.
USA uses corn to produce ethanol while Brazil, leading producer & exporter of biofuel makes ethanol from sugarcane. ADM believes that future of biofuel & other alternative sources doesn't depend on one feed or industry and expects the market to grow further.
"Growing at the rate of more than 30% from the year 2006, world Biodiesel production is likely to touch the mark of 12 Billion liters by the end of 2010. Global Ethanol market is expected to exceed 1,20,000 Million mark by the end of the year 2020, with a growth rate of above 6.5% from 2006," estimates the report "Biofuel Market Worldwide (2006)" published by RNCOS.
Patricia Woertz, ADM CEO said that whether a sustainable biofuel market would be there or not is not important, the main question is how huge this market might become. She believes the market growth will strongly depend on energy security, agricultural economics & environmental improvement.
As per Agricultural Dept. of USA, amount of corn required to produce ethanol is expected to increase by 34% to reach over 2.1 Billion bushels in 2006 with corn ending stocks are predicted to decline by 40% to reach around 1.2 Billion bushels.
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