Brazilian tariffs and higher oil prices cause the industry to teeter
Now to the news out of Brazil and its tariff on U.S. ethanol.
Biofuels leaders and corn growers say that it will be devastating to the industry. The Brazilian government let the current tariff rate quota expire.
It replaced it with a 20 percent tariff on all imports of U.S. ethanol.
Since May, U.S. exports to Brazil have fallen to less than four million gallons, but Brazil has exported nearly 96 million gallons to the U.S.
Oil prices moved higher this week and that could provide support for ethanol and the corn market.
News of the COVID vaccine rollout is offering some hope for a return to normal, but will that normal be the same as before and will fuel consumption return to levels seen before the pandemic?
Gas Buddy’s Patrick Dehaan says that it is too early to tell: “We just have no way of realizing at this point how it’s going to progress, how many doses of vaccine, any issues that could arise from that. 2021 will likely be the most difficult year to accurately forecast when it comes to oil and gas prices, because of the amount of factors that are completely unpredictable.”
He says that positive news on the vaccine will continue to support prices, but any discouraging developments will make prices drop.