By Timothy Gardner
NEW YORK (Reuters) - The United States may need to get more of its ethanol from Brazil in order to boost the country's energy security and cut pressure on food prices, the chief executive of energy and commodity exchange IntercontinentalExchange Inc (ICE.N: Quote, Profile, Research) said on Wednesday.
"Right now (the U.S. has) a high tax on ethanol coming in from Brazil, which is hard to explain," CEO Jeffrey Sprecher told the Reuters Exchanges and Trading Summit in New York.
The United States places a 54-cents-per-gallon tariff on ethanol from Brazil to protect its farmers that make the alternative fuel mostly from corn. The tariff is set to expire at the end of the year, but could be renewed.
Sprecher said U.S. corn-based ethanol has helped produce a spike in corn prices to record levels, and the price pressure has also spread to other grain prices as farmers have tried to plant as much corn as they can.
"So it means you've got to grow it in land that maybe is not used right now for the food supply," said Sprecher. "That would also suggest to me that maybe it's not in the United States."
The United States and Brazil are the world's top two ethanol producers.
Last year the U.S. imported about 3 percent of its ethanol from Brazil, according to the Renewable Fuels Association, an industry group.
With sugar supplies glutted, prices for the sweetener are at historic lows, so Brazil's sugarcane-based ethanol has less of an impact on food prices. From field to tailpipe, it is also a more efficient fuel than corn-based ethanol and lower in greenhouse gas emissions. Continued...
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