The decision of the Brazilian government to increase ethanol blending in gasoline from 27% to 30% would prompt the industries to divert an extra 3.5% sugar to the ethanol sector, as per the study of City Research, reports Reuters.
The proposal in this regard would be sent to Congress soon and is likely to pass as several members support the ethanol industry.
Brazil produces 90% of its total ethanol from sugarcane and the remaining from corn. Sucrose extracted from cane is used to produce sugar and ethanol.
The increase in ethanol production would lower the sugar production in the country.
Sugar exports from India would be capped due to an ethanol blending programme in the country, said BMI, a research unit of Fitch Solutions.
