« Updated Corn Ethanol Economics | Home | Hot Gas Might Be Costing You More »
S&P Highlights Risks For Ethanol Producers Amid Volatility
By Mr Ethanol | June 27, 2008
CNNMoney.com:
Standard & Poor’s said smaller pure-play ethanol producers face “high” business and financial risks due to market volatility.
The ratings agency said in a report that political-event risk also could become a risk factor for the industry “if the food versus fuel debate sways currently positive public opinion.”
The report comes a day after VeraSun Energy Corp. (VSE) said it will delay the startup of an ethanol production facility in North Dakota, the third plant this month the company decided to not open due to volatile market conditions. The postponements reflect the immense pressure ethanol producers are under as their margins are squeezed by high corn and natural-gas prices.
VeraSun shares recently fell 2.8% to $4.
Wednesday, VeraSun Chief Executive Don Endres said, “With oil prices hovering around record levels, there is a tremendous urgency for domestically produced fuel options in our country.” He called ethanol a solution that “will continue to have a strategic impact on diversifying our energy needs.”
S&P said biofuels, especially ethanol, have become a “preferred way to diversify for global agricommodity companies,” and that widespread government support to extend biofuel production has been triggered by “rising and volatile fossil fuel prices and the call for renewable energy sources as a remedy to carbon emissions.”
But S&P Credit Analyst Michael Seewald said, “The credit outlook for ethanol producers varies across regions and business models, according to the local production environment.” For example, Brazil - which has competitive advantages in the sugar cane-based ethanol market - could see its edge widen as sugar prices rise on increasing world demand. Read full article.
Topics: Biofuel, Ethanol, Industry, Market, News, Tips |
Related Posts
- China To Offer Support Policies For Non-Food Biofuels
- Understanding The Full Costs Of Corn Ethanol
- Problems With Energy
- Alert On Risks Of Ethanol Subsidies
- Ethanol Buzz Fuels Planning By Colonial Pipeline Company
- The Sugar-Ethanol Equation
- Ethanol Industry Looking Up
- State Sending Retroactive Checks To Ethanol Plants
- The ‘New Wave’ For Grain Markets
- Open Borders, Ethanol: Double Whammy For State Hog Industry
New Way Of Making Easy Money Online