In Jamaica, one of the nation's three ethanol producers – Jamaica Ethanol Processing – has been forced to close its operations following the continuing rise of feedstock prices.

'The CBI (Caribbean Basin Initiative) ethanol business has been in distress for the last three years, initiated by the volatility of the commodities market and essentially an upside down trading set-up where the primary input – hydrous ethanol feedstock – cost is higher than the product that we sell,' says managing director of Jamaica Ethanol Processing, Erwin Jones.

Before it closed, the company's facility produced 50 million gallons a year of ethanol, and employed 31 staff.

Jamaica Ethanol converted hydrous ethanol imported from Brazil into anhydrous ethanol. However, over-demand coming from different sectors, high sugar prices and bad weather has squeezed the company out of the market.

'Prices have gone up substantially in Brazil,' Jones comments. 'So what the [Brazilian] government has done in the case of shortages there due to high demand, is to adjust back to the blend ratio ethanol-gasoline.'

Jones continues: 'The trading arrangement with the US seems to have run into a problem in the face of the budget deficit issues with the US. I think we are about to see the end of the blender's credit funds, which helps to provide a price support for ethanol, and the import tariff.'

Jamaica Ethanol is expected to have some continuing operations supplying sugar but, as Jones explains, 'the ethanol business is done for all intents and purposes'.

source: biofuels-news

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