Cable Viewer

Currently released so far... 12532 / 251,287

### Browse latest releases

2010/11 2010/12 2011/01 2011/02 2011/03 2011/04 2011/05
2010/11/28 2010/11/29 2010/11/30
2010/12/01 2010/12/02 2010/12/03 2010/12/04 2010/12/05 2010/12/06 2010/12/07 2010/12/08 2010/12/09 2010/12/10 2010/12/11 2010/12/12 2010/12/13 2010/12/14 2010/12/15 2010/12/16 2010/12/17 2010/12/18 2010/12/19 2010/12/20 2010/12/21 2010/12/22 2010/12/23 2010/12/24 2010/12/25 2010/12/26 2010/12/27 2010/12/28 2010/12/29 2010/12/30
2011/01/01 2011/01/02 2011/01/04 2011/01/05 2011/01/07 2011/01/09 2011/01/10 2011/01/11 2011/01/12 2011/01/13 2011/01/14 2011/01/15 2011/01/16 2011/01/17 2011/01/18 2011/01/19 2011/01/20 2011/01/21 2011/01/22 2011/01/23 2011/01/24 2011/01/25 2011/01/26 2011/01/27 2011/01/28 2011/01/29 2011/01/30 2011/01/31
2011/02/01 2011/02/02 2011/02/03 2011/02/04 2011/02/05 2011/02/06 2011/02/07 2011/02/08 2011/02/09 2011/02/10 2011/02/11 2011/02/12 2011/02/13 2011/02/14 2011/02/15 2011/02/16 2011/02/17 2011/02/18 2011/02/19 2011/02/20 2011/02/21 2011/02/22 2011/02/23 2011/02/24 2011/02/25 2011/02/26 2011/02/27 2011/02/28
2011/03/01 2011/03/02 2011/03/03 2011/03/04 2011/03/05 2011/03/06 2011/03/07 2011/03/08 2011/03/09 2011/03/10 2011/03/11 2011/03/13 2011/03/14 2011/03/15 2011/03/16 2011/03/17 2011/03/18 2011/03/19 2011/03/20 2011/03/21 2011/03/22 2011/03/23 2011/03/24 2011/03/25 2011/03/26 2011/03/27 2011/03/28 2011/03/29 2011/03/30 2011/03/31
2011/04/01 2011/04/02 2011/04/03 2011/04/04 2011/04/05 2011/04/06 2011/04/07 2011/04/08 2011/04/09 2011/04/10 2011/04/11 2011/04/12 2011/04/13 2011/04/14 2011/04/15 2011/04/16 2011/04/17 2011/04/18 2011/04/19 2011/04/20 2011/04/21 2011/04/22 2011/04/23 2011/04/24 2011/04/25 2011/04/26 2011/04/27 2011/04/28 2011/04/29 2011/04/30
2011/05/01 2011/05/02 2011/05/03 2011/05/04 2011/05/05 2011/05/06 2011/05/07 2011/05/08 2011/05/09 2011/05/10 2011/05/11

### Browse by creation date

66 72 73 75 79 85 86 87 88 89 90 91 92 93 96 97 00 01 02 03 04 05 06 07 08 09 10
1966/12
1972/02 1972/08
1973/04
1975/03
1979/08
1985/03 1985/06
1986/05
1987/06
1988/01
1989/12
1990/01 1990/07 1990/08 1990/10
1991/05
1992/01 1992/06 1992/12
1993/10
1996/11
1997/12
2000/05 2000/06 2000/09 2000/11
2001/02 2001/03 2001/06 2001/07 2001/09 2001/10 2001/11
2002/01 2002/02 2002/03 2002/04 2002/07 2002/08 2002/09 2002/11
2003/01 2003/02 2003/03 2003/04 2003/05 2003/06 2003/07 2003/08 2003/09 2003/10 2003/11 2003/12
2004/01 2004/02 2004/03 2004/04 2004/05 2004/06 2004/07 2004/08 2004/09 2004/10 2004/11 2004/12
2005/01 2005/02 2005/03 2005/04 2005/05 2005/06 2005/07 2005/08 2005/09 2005/10 2005/11 2005/12
2006/01 2006/02 2006/03 2006/04 2006/05 2006/06 2006/07 2006/08 2006/09 2006/10 2006/11 2006/12
2007/01 2007/02 2007/03 2007/04 2007/05 2007/06 2007/07 2007/08 2007/09 2007/10 2007/11 2007/12
2008/01 2008/02 2008/03 2008/04 2008/05 2008/06 2008/07 2008/08 2008/09 2008/10 2008/11 2008/12
2009/01 2009/02 2009/03 2009/04 2009/05 2009/06 2009/07 2009/08 2009/09 2009/10 2009/11 2009/12
2010/01 2010/02

### Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z
Embassy Athens Embassy Asuncion Embassy Astana Embassy Asmara Embassy Ashgabat Embassy Apia Embassy Ankara Embassy Amman Embassy Algiers Embassy Addis Ababa Embassy Accra Embassy Abuja Embassy Abu Dhabi Embassy Abidjan Consulate Auckland Consulate Amsterdam Consulate Adana American Institute Taiwan, Taipei
Embassy Bujumbura Embassy Buenos Aires Embassy Budapest Embassy Bucharest Embassy Brussels Embassy Bridgetown Embassy Bratislava Embassy Brasilia Embassy Bogota Embassy Bishkek Embassy Bern Embassy Berlin Embassy Belmopan Embassy Belgrade Embassy Beirut Embassy Beijing Embassy Banjul Embassy Bangkok Embassy Bandar Seri Begawan Embassy Bamako Embassy Baku Embassy Baghdad Consulate Barcelona
Embassy Copenhagen Embassy Conakry Embassy Colombo Embassy Chisinau Embassy Caracas Embassy Canberra Embassy Cairo Consulate Curacao Consulate Ciudad Juarez Consulate Chennai Consulate Casablanca Consulate Cape Town Consulate Calgary
Embassy Dushanbe Embassy Dublin Embassy Doha Embassy Djibouti Embassy Dili Embassy Dhaka Embassy Dar Es Salaam Embassy Damascus Embassy Dakar Consulate Dubai
Embassy Freetown Consulate Fukuoka
Embassy Guatemala Embassy Gaborone Consulate Guayaquil Consulate Guadalajara
Embassy Helsinki Embassy Harare Embassy Hanoi Consulate Ho Chi Minh City Consulate Hermosillo Consulate Hamilton Consulate Hamburg Consulate Halifax
Iran RPO Dubai Embassy Islamabad Consulate Istanbul
Embassy Jakarta Consulate Jerusalem Consulate Jeddah
Embassy Kyiv Embassy Kuwait Embassy Kuala Lumpur Embassy Kinshasa Embassy Kingston Embassy Kigali Embassy Khartoum Embassy Kathmandu Embassy Kampala Embassy Kabul Consulate Kolkata
Embassy Luxembourg Embassy Luanda Embassy London Embassy Ljubljana Embassy Lisbon Embassy Lima Embassy Lilongwe Embassy La Paz Consulate Lahore Consulate Lagos
Mission USOSCE Mission USNATO Mission UNESCO Embassy Muscat Embassy Moscow Embassy Montevideo Embassy Monrovia Embassy Minsk Embassy Mexico Embassy Mbabane Embassy Maputo Embassy Manila Embassy Manama Embassy Managua Embassy Malabo Embassy Madrid Consulate Munich Consulate Mumbai Consulate Montreal Consulate Monterrey Consulate Milan Consulate Melbourne
Embassy Nicosia Embassy Niamey Embassy New Delhi Embassy Ndjamena Embassy Nassau Embassy Nairobi Consulate Naples Consulate Naha
Embassy Ouagadougou Embassy Ottawa Embassy Oslo
Embassy Pristina Embassy Pretoria Embassy Prague Embassy Port Of Spain Embassy Port Louis Embassy Port Au Prince Embassy Phnom Penh Embassy Paris Embassy Paramaribo Embassy Panama Consulate Peshawar
Embassy Quito Consulate Quebec
REO Basrah Embassy Rome Embassy Riyadh Embassy Riga Embassy Reykjavik Embassy Rangoon Embassy Rabat Consulate Rio De Janeiro Consulate Recife
Secretary of State Embassy Suva Embassy Stockholm Embassy Sofia Embassy Skopje Embassy Singapore Embassy Seoul Embassy Sarajevo Embassy Santo Domingo Embassy Santiago Embassy Sanaa Embassy San Salvador Embassy San Jose Consulate Strasbourg Consulate St Petersburg Consulate Shenyang Consulate Shanghai Consulate Sapporo Consulate Sao Paulo
Embassy Tunis Embassy Tripoli Embassy Tokyo Embassy The Hague Embassy Tel Aviv Embassy Tehran Embassy Tegucigalpa Embassy Tbilisi Embassy Tashkent Embassy Tallinn Consulate Toronto Consulate Tijuana
USUN New York USEU Brussels US Office Almaty US Mission Geneva US Interests Section Havana US Delegation, Secretary UNVIE Embassy Ulaanbaatar
Embassy Vilnius Embassy Vienna Embassy Vatican Embassy Valletta Consulate Vladivostok Consulate Vancouver
Embassy Windhoek Embassy Wellington Embassy Warsaw
Embassy Yerevan Embassy Yaounde
Embassy Zagreb

### Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ASEC AF AR ARF AG AORC APER AS AU AJ AM ABLD APCS AID APECO AMGT AFFAIRS AMED AFIN ADANA AEMR AE ADCO AA AECL AADP ACAO ANET AY APEC AORG ASEAN ABUD AINF AFSI AFSN AGR AROC AO AODE AL ACABQ AGMT AORL AX AMEX ATRN ADM AFGHANISTAN AZ ASUP AND ARM AQ ATFN AMBASSADOR ACBAQ ADPM AC ASIG ASCH AGAO ACOA AUC ASEX AIT AMCHAMS AER AVERY AGRICULTURE AMG AFU AN ALOW ASECKFRDCVISKIRFPHUMSMIGEG ACS
BA BR BU BK BEXP BO BL BM BC BT BRUSSELS BX BIDEN BTIO BG BE BD BY BBSR BB BP BN BILAT BF BH BTIU BWC BMGT
CO CH CA CS CE CASC CU CI CDG CVIS CG CWC CIDA CM CICTE CMGT COUNTER CPAS COUNTRY CJAN CBW CBSA CEUDA CD CAC CODEL CW CBE CHR CT CDC CFED COM CIS CR CKGR CVR CIA CLINTON CY COUNTERTERRORISM CITEL CLEARANCE COE CN CARICOM CB CONDOLEEZZA CACS CSW CIC CITT CONS COPUOS CL CARSON CACM CDB CROS CLMT CTR CJUS CF CTM CAN CAPC CV CBC CNARC
DR DA DK DJ DHS DPRK DEPT DEA DISENGAGEMENT DE DOMESTIC DOD DOE DS DTRA DEFENSE DO DAO DCM DEAX
ETTC EFIN ECON EAIR EG EINV ETRD ENRG EC EFIS EAGR EUN EAID ELAB ER EPET EMIN EU ECPS EN EWWT ELN EIND ELTN EINT ECA EPA ENGR ETRC EXTERNAL ELECTIONS EZ ECIN EI ENVI ETRO ETRDEINVECINPGOVCS ETRN ET EK ES EINVEFIN ERD EUR ETC ENVR EAP ENIV ECONOMY EINN EFTA ECONOMIC EXBS ECUN ENGY ECONOMICS EIAR EINDETRD EREL EUC ESENV ECONEFIN EURN EDU ETRDEINVTINTCS ECIP ENERG EFIM EAIDS EAIG ECONCS EEPET ESA EXIM ENNP ECINECONCS EFINECONCS EUREM ETRDECONWTOCS EUNCH EINVETC EINVECONSENVCSJA EUMEM ETRA ERNG
FI FR FTA FARC FJ FTAA FAC FOREIGN FBI FAO FAS FM FINR FREEDOM FOR FINANCE FOI FMLN FDA FO FISO
GV GG GM GH GOV GOI GL GT GY GAERC GA GF GR GE GZ GAZA GANGS GCC GTIP GERARD GLOBAL GTMO
HR HA HO HU HUMAN HK HILLARY HI HURI HSTC HYMPSK HUMOR HEBRON
IR IC IN IAEA IT IBRD IS ITU ILO IZ ID ICRC IPR ISRAELI IIP ICAO IMO INMARSAT IWC INTERNAL IV INDO ITPHUM ITPGOV ITALIAN IO IBET INR ICJ ICTY IRS IA INTERPOL IRAQI IEA INRB IL IMF ITRA ISLAMISTS ITALY IQ IAHRC IZPREL IRAJ IDP ILC IRC IACI IDA ITF IF ISRAEL ICTR IGAD INRA INRO IEFIN INTELSAT
JA JUS JO JM JP JOSEPH JAMES JOHNNIE JOHN
KCRM KJUS KWMN KISL KIRF KDEM KTFN KTIP KFRD KPRV KCOR KNNP KAWC KUNR KGHG KV KIPR KFLU KSTH KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KSUM KTIA KTDB KPAO KMPI KZ KMIG KBCT KSCA KN KPKO KPAL KIDE KOMC KS KOLY KU KWBG KPAONZ KNUC KHLS KMDR KE KNNPMNUC KSTC KWAC KERG KACT KSCI KHDP KDRG KVPR KICC KPRP KBIO KFLO KCFE KCIP KTLA KTEX KSEP KHIV KCSY KTRD KID KGIC KRVC KNAR KSPR KMRS KNPP KJUST KMCA KPWR KG KTER KRCM KIRC KR KSEO KNEI KTBT KCFC KSAF KSAC KCHG KAWK KGCC KPLS KREL KMFO KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KFTFN KVRP KBTR KCOM KO KLIG KDEMAF KRAD KOCI KAID KNSD KGIT KFSC KWMM KPAI KICA KHUM KREC KRIM KSEC KCMR KPIN KESS KDEV KCGC KOM KRGY KPOA KBTS KHSA KMOC KCRS KVIR KX KWWMN KPAK KWNM KWMNCS KRFD KDDG KIFR KFIN KOMS KCRCM KNUP
LE LY LI LG LH LTTE LU LO LAB LOG LA LT LABOR
MARR MU MOPS MNUC MO MASS MCAP MX MY MZ MUCN MTCRE MIL ML MEDIA MPOS MA MP MERCOSUR MG MR MI MD MK MOPPS MASC MTS MLS MILI MAR MEPN MAPP MTCR MEPI MEETINGS MW MAS MRCRE MT MCC MIK MAPS MARAD MDC MQADHAFI MTRE MV MEPP MILITARY MASSMNUC MC
NZ NL NATO NO NI NU NS NASA NAFTA NP NDP NIPP NPT NG NEW NE NSF NZUS NR NH NA NSG NC NRR NATIONAL NT NGO NSC NPA NV NK NAR NORAD NSSP NATOPREL NW NPG NSFO
OVIP OPDC OTRA OREP OAS OPRC OPIC OECD OPCW OFDP OIIP OEXC ODIP OSCE OBSP OSCI OIE OTR OMIG OSAC OFFICIALS ON OFDA OES OVP OCII OHUM OPAD OIC OCS
PREL PGOV PHUM PINR PTER PARM PREF PK PINS PMIL PA PE PHSA PM PROP PALESTINIAN PBTS PARMS POL PO PROG PL PAK POLITICS PBIO PTBS POLICY PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PBT PTERE PRGOV PORG PP PS PGOF PKFK PSOE PEPR PPA PINT PMAR PRELP PREFA PINF PNG PFOR PUNE PDOV PGOVLO PAO PHUMBA PSEPC PCUL PNAT PREO PLN PNR POLINT PRL PGOC POGOV PU PF PY PGOVE PG PCI PINL POV PAHO PGGV PHALANAGE PARTY PHUS PDEM PECON PROV PAS PHUMPREL PGIV PRAM PHUH PSA PHUMPGOV PEL PSI PAIGH POLITICAL PARTIES POSTS
QA
RU RS RP REACTION REPORT RIGHTS RO RCMP RW RM REGION RSP RF RICE RFE RUPREL ROOD RIGHTSPOLMIL ROBERT RELATIONS RSO
SNAR SOCI SZ SENV SU SA SCUL SP SMIG SW SO SY SL SENVKGHG SR SF SYRIA SI SWE SARS SC SAN SN STEINBERG SG ST SPCE SIPDIS SYR SNARIZ SNARN SSA SHI SK SPCVIS SOFA SEVN SIPRS SNARCS SAARC SHUM SANC SEN SH SCRS
TRGY TBIO TU TS TSPA TSPL TT TPHY TK TI TERRORISM TH TIP TC TZ TNGD TW THPY TL TV TX TO TRSY TINT TN TURKEY TBID TD TF TFIN TP TAGS TR
UV UK UNGA US UY USTR UNSC UN UNHRC UP UG USUN UNEP UNESCO USPS UZ USEU UNCHR USAID UNMIK UNHCR UE UNVIE UAE UNO USOAS UNODC UNCHS UNFICYP UNIDROIT UNDESCO UNCHC UNDP UNAUS UNPUOS UNC UNCND UNICEF UNCSD UNDC USNC
VT VE VZ VTPREL VI VM VN VTIZ VAT VC VTEG
WTO WTRO WS WTRQ WI WZ WHO WWARD WBG WB WHA WITH WMD WIPO WMO WFP WHTI WEU WA
XG XT XZ XM XR XA XY XX XF XL XW XV XB XU XS XH XK XD XI XC XE XQ XTAG
YM YI YE YMCS
ZR ZB ZI ZU ZJ ZEALAND ZK ZF ZP ZN ZL ZA ZANU ZO ZOELLICK

### Browse by classification

CONFIDENTIAL CONFIDENTIAL//NOFORN SECRET SECRET//NOFORN UNCLASSIFIED UNCLASSIFIED//FOR OFFICIAL USE ONLY

### Community resources

Follow us on Twitter Check our Reddit Twitter this Digg this page Contact us on IRC

courage is contagious

### Viewing cable 06BRASILIA788, THE ETHANOL DILEMMA - INADEDQUATE SUPPLY VS GROWING DEMAND

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:

- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #06BRASILIA788.

Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06BRASILIA788 | 2006-04-24 19:00 | 2011-01-12 00:00 | UNCLASSIFIED | Embassy Brasilia

`

    VZCZCXRO3060
    PP RUEHRG
    DE RUEHBR #0788/01 1141900
    ZNR UUUUU ZZH
    P 241900Z APR 06
    FM AMEMBASSY BRASILIA
    TO RUEHC/SECSTATE WASHDC PRIORITY 5190
    INFO RUEHRI/AMCONSUL RIO DE JANEIRO 1928
    RUEHSO/AMCONSUL SAO PAULO 6808
    RUEHRG/AMCONSUL RECIFE 4648
    RUEHBU/AMEMBASSY BUENOS AIRES 3952
    RUEHSG/AMEMBASSY SANTIAGO 5447
    RUEHAC/AMEMBASSY ASUNCION 5369
    RUEHMN/AMEMBASSY MONTEVIDEO 6189
    RUEHPE/AMEMBASSY LIMA 2953
    RUEHLP/AMEMBASSY LA PAZ 4520
    RUEHCV/AMEMBASSY CARACAS 3209
    RUEHBO/AMEMBASSY BOGOTA 3709
    RUEHGE/AMEMBASSY GEORGETOWN 1043
    RUEHQT/AMEMBASSY QUITO 1787
    RUCPDO/USDOC WASHDC
    RHEBAAA/USDOE WASHDC
    RUEATRS/DEPT OF TREASURY WASHDC

` `

    UNCLAS SECTION 01 OF 02 BRASILIA 000788

    SIPDIS
    SIPDIS

    DEPT FOR EWHITE OES/EGC AND PKELLY OES/STC; OES/ETC GTHOMPSON
    USDOE FOR SLADISLAW
    DEPT PLEASE PASS TO USTR FOR MSULLIVAN
    DEPT PLEASE PASS TO USAID FOR LAC/AA
    USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRSICOLL/MWAR D
    USDOC FOR 3134/ITA/USFCS/OIO/WH/RD/DANDERSON/SHUPKA
    E.O. 12958: N/A
    TAGS: TRGY SENV ENRG KSCA ETRD EAGR BR
    SUBJECT: THE ETHANOL DILEMMA - INADEDQUATE SUPPLY VS GROWING DEMAND

    ¶1. Summary: As countries worldwide search for alternatives to increasingly expensive petroleum, not to mention green fuel alternatives that help meet Kyoto Protocol targets, Brazil finds itself in an enviable position. The world's largest producer of both ethanol and sugar is the purveyor of technology, infrastructure and processes that could help fuel a biofuel revolution. In fact, Brazil's ethanol program is so successful it has drawn the likes of Bill Gates and Google's founders, Sergey Brin and Larry Page, into the fray, promoting expanded ethanol production in the United States. Yet, despite the monumental success of ethanol in Brazil, it is not happening without some growing pains.

    ¶2. Brazil now finds itself in the unforeseen position of not having enough supply to satisfy demand. The unanticipated flex-fuel boom in Brazil coupled with increasing international demand for ethanol is exerting serious pressure on Brazil's domestic production apparatus. Sales of flex-fuel cars reached approximately 80% of new vehicle sales in 2005. The resulting increase in demand for ethanol necessarily led to price increases. Moreover, ethanol exports increased by 1.8 billion liters in 2005 (a 269% jump over 2004). This facet of increased demand is compounded by the fact that foreign importers are offering a price 8-10% higher than Brazil's internal market. During the current interharvest period supplies are limited and prices have skyrocketed, leaving Brazilian consumers and officials with little hope for price reductions until production renews at the end of April. Taken as an omen, one of the most pressing questions facing Brazil is how to create an infrastructure which can deal with the escalated demand for ethanol. End Summary

    ¶3. The question of how Brazil intends to address this supply and demand issue is still up for debate. In conversations with Scioff, Angelo Bressan, Director of the Ministry of Agricultures sugar/alcohol division, noted that the GoB has only two ways to regulate ethanol. The first involves adjusting the requisite amount of ethanol to be mixed in gasoline. The GoB recently utilized this approach dropping the percentage from 25 to 20%. (reftel) Although this measure increased supply, it had little to no effect on prices. A second option would be to regulate ethanol exports by, for example, linking exports to domestic stocks via a system of quotas, but leaving prices free. This argument has been negatively received both by industry and free market advocates within the GoB. Unica (the Sao Paulo Sugarcane Industry Association) believes that this mechanism would not be able to function without government interference in pricing. Bressan noted that the GoB and industry have had an open dialogue focusing on how to address the problem of supply but without any decisive outcomes as of yet.

    ¶4. The sugar/alcohol industry, for its part, is looking to expand both the area of planted cane and the industry's capacity to refine it. Preliminary estimates are that US$ 14 billion is going to be invested into refineries that can crush and produce sugar/alcohol by 2011. Meanwhile, another US$ 7 billion is being invested into expanding cultivated land. Bressan added that 11 new refineries are already under construction with an additional 16 planned for 2007. That said, the analgesic effects of these investments are still some years away. Because it is not cost-effective to transport cane long distances, refineries and agricultural lands must remain in close proximity. Once a distillery is completed, there will still be a 12-15 month lag time (the crop cycle for cane) before production commences. Moreover, the upward swoop of land prices in cane producing regions (49% over the last year, compared to the national average of 2%), is certain to become an obstacle to the expanding industry.

    ¶5. This, of course, does not address the GoB's principal concern of how to maintain competitive prices for ethanol during the interharvest period. Bressan has stated that the GoB and industry are discussing palliative measures but failed to expand on what they

    BRASILIA 00000788 002 OF 002

    were. They are simply "discussing the issue." The most prominent idea, reflected in numerous media accounts, is to create stockpiles of sufficient size to guarantee supply. While the industry and government agree to the idea in concept, both sides dispute who should be responsible for creating mechanisms and supplying the necessary funding for the stocks. While Roberto Rodrigues, Brazil's Minister of Agriculture, initially said that the government was studying inexpensive financing mechanisms for creating stocks, he later retracted those comments affirming that stocks are the responsibility of the productive chain.

    ¶6. In terms of Brazil and the United States, and the growing attention exhibited by parties like Gates, Brin and Page, and rising interest in California, Bressan noted that the Ministry would like to see U.S. tariff barriers dropped on combustible ethanol. But, he stated, it needed to be done in a systematic fashion. He fears that when the U.S. market opens, Brazilian consumers will be adversely affected by a dearth in supply resulting from profit hungry exporters. Bressan further maintained that the GoB has an interest in creating a world market and that the U.S. and Brazil should work together to achieve that goal. He added too, that countries, including the U.S., have a vested interest in working with Brazil because of the "know-how" they have regarding the production and processing of ethanol.

    ¶7. A crucial link in this process, from his perspective, will be spreading the supply chain throughout the developing world, especially in Africa and Asia. The U.S. and Brazil, he stated emphatically, are not capable of sustaining a world ethanol market on their own. That, of course, has not stopped the likes of Petrobras from signing a contract in February to build a pipeline from Goias (one of Brazil's principal cane producing regions) down to Brazil's largest port in Santos. A portent of how industry views the future role of ethanol.

    ¶8. Comment: In the short-term, it is clear that alcohol induced euphoria will continue the industry's ascension. As the world's largest producer of sugar and alcohol, Brazil is taking measures to increase production and at least discussing how to satisfy supply in the boom time. In response to the crisis over the last four months and the elevated prices, the GoB has recognized its impotence and is "throwing in the towel", waiting for the new harvest. This is currently underway, and greater supplies of ethanol are expected in filling stations by early May. End Comment

    LINEHAN

`