LONDON (Dow Jones)--Brazil's ethanol consumption now outstrips gasoline consumption and as a consequence the alternative fuel's influence on the sugar market is becoming more prevalent, sugar analyst Czarnikow said Thursday.
Ethanol demand is currently near 65 billion liters, compared with 23 billion liters in 2003, and sugarcane is the feedstock for around 40% of world ethanol production, said the report.
"This (increased demand) is being driven by developments in Brazil's domestic market, as a result of the rapid adoption and acceptance of flex fuel technology (in cars), and in the European Union and U.S. as a result of policy measures and rising energy prices," said Czarnikow.
Ethanol production accounted for around 55.9% of Brazil's 2006-07 sugarcane crop usage and is expected to grow to around 56.9% in 2008-09, said Czarnikow.
-By Sarah McFarlane, Dow Jones Newswires; 44 20 7842 9327; sarah.mcfarlane@dowjones.com
(END) Dow Jones Newswires