Ethanol fires hope for China’s poor Guangxi

Something is afoot in China’s top sugar-growing region of Guangxi.

Now, hope runs high in China for Guangxi’s about 30 million farmers to jump on the biofuel fever. Beijing has begun encouraging ethanol made from non-grain crops, such as cassava — known also as tapioca — the region’s other main crop.
Beijing wants Guangxi — roughly the size of Britain — to house facilities to produce as much as 1 million tonnes of fuel ethanol per year from cassava, the officials said.

But industry officials warned it would not be easy for the raft of new fuel plants to obtain enough home-grown feedstock. Also, Beijing was unlikely to allow imports because subsidies were aimed at helping local farmers.

Higher cassava prices, coupled with lower oil prices, are were already squeezing margins at ethanol producers.

Privately owned Xintiande, based in the port city of Qinzhou, has already suspended a plan to add 200,000 tonnes of capacity to its current 100,000 tonnes, partly due to tax changes and COFCO’s first plant to be built not too far away.

Washington Post