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Next six months critical for ethanol industry

Agriculture.com Staff 03/06/2006 @ 11:06am

The ethanol industry will soon be in a critical six-month time period that will determine whether many markets make it their long-term oxygenate of choice as a replacement for MTBE.

Despite concerns about tight supplies and higher prices, ethanol is in demand in major population areas, primarily in the East coast and Dallas and Houston, Texas, according to Tom Slunecka, executive director of the Ethanol Promotion and Information Council (EPIC).

"We certainly do hope that ethanol makes a good impression in these markets and that there's no concern over its ability to enrich the fuels from a pricing standpoint," he said. "We really need to make sure that the transition happens smoothly and that consumers are aware and happy about the product."

That is the goal of EPIC, which is an alliance of ethanol producers, farmer-owned cooperatives, corn grower groups, and other industry partners. At the recent Commodity Classic, Slunecka told corn growers and other ethanol industry players that they need to be very focused in these major markets on reaching out to consumer influencers, such as mechanics, gas stations and car retailers.

Slunecka said the industry needs to get through the current short supply situation quickly and ramp up production to bring prices down and meet consumer demand.

"Ethanol like every other industry is supply-demand driven and we have a very large increase in demand for our product right now so it is driving prices of ethanol up," he said. "The ethanol industry is building to this challenge so that within 18-24 months we will have enough capacity to handle this new market and prices will level out."

The ethanol industry will soon be in a critical six-month time period that will determine whether many markets make it their long-term oxygenate of choice as a replacement for MTBE.

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