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Brazil eyes ethanol as fast track to power

Brazil aims to double its production of ethanol in 10 years as the high price of oil and growing concerns over climate change spark a demand for biofuels.

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Flying over the heart of Brazil, a vast savannah known as the cerrado here, one could be forgiven for mistaking the setting for Iowa, Kansas, or virtually anywhere along the US farm belt.

Neat acres of cotton, corn, and soybean extend into the horizon, and even American farmers have arrived to join a boom that over the past few years has positioned Brazil to overtake the US as the world's agricultural superpower.

Last year, Brazil surpassed the US as the largest exporter of soybeans. That followed its scoring the No. 1 spot in beef exports in 2004. And now, as the high price of oil and concerns over climate change spark global demand for alternative fuels, Brazil is aiming to double its production of sugarcane for ethanol in the next decade. As investors flock to this colossal country with its ideal growing climate, Brazil is hoping ethanol will help speed its sluggish rise as an economic power.

"Brazil has already consolidated its position as the agriculture supplier of the world," says Andre Nassar, general manager of the Institute for International Trade Negotiations (ICONE) in São Paulo, Brazil. "Now I think the Brazilian government sees ethanol as an instrument to make other countries pay attention to us, as a supplier of both food and energy."

Brazil's clout has been on display this week during President Luiz Inacio Lula da Silva's three-day trip to India, where the two countries announced plans to quadruple trade to $10 billion by 2010 and boost India's use of biofuels. The two rising economic powers also aimed to enhance cooperation as a strong voice of the developing world before heading into talks at the Group of Eight (G-8) summit in Germany this week.

Brazil's clout in trade talks

The European Union has invited Brazil, India, and the US to meet in Germany later this month to attempt to hash out a deal on World Trade Organisation (WTO) negotiations. Launched in 2001, the WTO's Doha round of talks aims to break down trade barriers that hinder the economic progress of poor countries.


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