This from Mike Burnick:

Brazil is far and away the global leader in ethanol production technology. In fact, the country began large-scale development of ethanol as an alternative fuel source amid the oil shock of the late 1970’s and early 80’s.

Today, ethanol accounts for 50% of Brazil’s total annual automotive fuel consumption. More than 70% of new cars sold in the country are flex-fuel capable. That means they’re able to run either on gasoline, ethanol, or some combination of the two.

Currently, Brazil is the world’s second-largest ethanol producer, and largest exporter, with total output of about six billion gallons a year.

The country has its sights set on becoming the dominant global exporter of ethanol by 2020. Brazil’s global ethanol exports could total as much as 200 billion gallons a year within that time – that’s over 30-times today’s ethanol production. Talk about a growing industry!

U.S. and Europe Just Can’t Compete with Brazilian Ethanol

Brazil enjoys a big advantage over other nations – as the world’s lowest cost ethanol producer. As shown in the graph above, Brazil can distill bio-fuels from sugar cane at a significant cost advantage to other nations.

Neither U.S. corn-based ethanol, nor wheat-based ethanol from Europe, can come close to matching the Brazilians on a production cost basis.

The sugarcane plant, which flourishes in Brazil’s tropical climate, produces a “yield” of 6,000 liters of ethanol per hectare of land. That’s about twice the yield of corn-based ethanol!

In fact, Brazilian ethanol is about 40% cheaper to make than in the U.S. – and costs less than half the price of European ethanol.

When Trade Tariffs Fall, Brazilian Ethanol Will Flow

Of course Washington, in their infinite wisdom, maintains silly trade tariffs equal to 54-cents a gallon on imported ethanol. This ridiculous trade barrier benefits a relatively small number of U.S. corn farmers at the expense of millions of American drivers.

In spite of this, Brazil’s largest ethanol export market remains the United States. In fact, Brazil shipped us more than 430 million gallons of ethanol last year – up fourfold from 2004! Wholesale gasoline prices in the U.S. are leaping above US$4 a gallon, and will keep spiraling higher as crude oil goes through the roof during what’s shaping up to be a long, hot summer.

Naturally, pressure is mounting for Congress to eliminate this silly, protectionist ethanol tariff. When that happens, the floodgates will open wide for much-cheaper Brazilian ethanol to flow freely into U.S. markets.

By leveraging the strength of its vast sugarcane growing region, and building on its already well-established ethanol producing technology, Brazil is perfectly positioned to benefit.

In fact, this emerging market tiger could easily become the Saudi Arabia of ethanol within the next decade. You heard it here first!

Hopefully, American protectionist trade tariffs are lifted soon… and when they are, Brazil’s ethanol expansion would quickly follow.

Dow Jones reports, “Rapid increases in high-fructose corn syrup prices will encourage a return to sugar usage in U.S. soft drinks and foods — a move that’s already gathering steam among consumers — sugar industry members predict.” Granted, you’d expect that line from the sugar industry, but the fact remains the cost of HFCS is coming into line with that of good old-fashioned sugar.

HFCS has become a staple of the American diet over the last 25 years. After sugar prices peaked in the early 80s, soft-drink makers switched to HFCS, and now the goop is used in everything from ketchup to salad dressing to fruit yogurt.

The problem is the way the human body handles HFCS, according to many nutritionists. As the San Francisco Chronicle explained the theory a few years ago, “The body processes the fructose in high fructose corn syrup differently than it does old-fashioned cane or beet sugar, which in turn alters the way metabolic-regulating hormones function. It also forces the liver to kick more fat out into the bloodstream. The end result is that our bodies are essentially tricked into wanting to eat more and at the same time, we are storing more fat.”

For this, we can lay blame at the feet of the sugar industry, whose lobby has forever convinced Washington to limit sugar imports — which as I noted on Monday, forces Americans to pay twice as much for sugar as the rest of the world. HFCS might have never come into the picture had it not been for government interference.

I have an idea: What if we end the subsidies for corn ethanol to help bring down the corn price, and end the import limits on sugar to help bring down the sugar price?

Hey, a guy can dream, can’t he?

According to the WSJ: “Two dozen Republican senators on Friday — including Republican presidential candidate John McCain — asked the Environmental Protection Agency to ease requirements mandated by Congress in 2007 to blend more ethanol and other renewable fuels into the gasoline supply.”

Kevin Kerr of Resource Trader Alert figures the political tide will turn decisively against corn-based ethanol by next year, with the departed George W. Bush taking the rap for the food fallout.