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World News

FACTBOX: World biofuels production and its impact

(Reuters) - The following are facts about biofuels production as world leaders meet in Rome this week to discuss the global food price crisis.

* The most important biofuel is ethanol, a substitute for gasoline, which is mainly produced from grains and sugar crops.

* The two largest producers of ethanol are the United States and Brazil although there is also growing production in the European Union.

* The U.S. makes ethanol from corn, a crop for which it is by far the world’s largest producer with output more than twice that of nearest rival China.

* Ethanol makers will use 4 billion bushels, one-third of this year’s projected U.S. corn crop, to produce the fuel during 2008/09, the U.S. Department of Agriculture estimated earlier this month.

* Corn prices have risen sharply during the last two years and currently stand at more than $6.00 a bushel on the Chicago Board of Trade compared with about $2.50 in June 2006.

* Brazil, the world’s largest exporter of bioethanol, uses sugar cane. More than half of Brazil’s sugar cane crop is now used to produce ethanol.

* Critics says ethanol production in Brazil is pushing cattle ranchers and farmers deeper into the Amazon rainforest. Brazil has rejected these claims.

* There is a global glut of sugar. Raw sugar futures in New York spiked in early 2006, buoyed by rising demand from the biofuels sector, but production then rose strongly and prices have subsequently fallen by nearly 50 percent.

* Biodiesel, the second most important biofuel, is mainly produced from vegetable oils such as soybean oil, rapeseed oil and palm oil. Other feedstocks such as tallow and used cooking oil are also used.

* The European Union, led by Germany and France, is the most important producing region and mainly relies on rapeseed oil as its feedstock.

* The United States is the second most important biodiesel producer and relies largely on soybean oil. The U.S. Department of Agriculture estimated earlier this month that biodiesel production would use 15 percent of the total soybean oil production for 2008/09, compared with 14 percent in 2007/08.

* Argentina and Brazil have been expanding output and are now also important producers, relying on soybean oil as the main feedstock.

* Several Asian countries, including Malaysia and Indonesia, have biodiesel plants which use palm oil although expansion has been hampered by high prices for the commodity which is also used in hundreds of food products and in a wide range of consumer goods soap to cosmetics.

* Environmental groups have expressed concern that an expansion of palm oil output, driven partly to biofuels production, is leading the destruction of rainforests in south-east Asia.

Reporting by Nigel Hunt; Editing by Janet McBride

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