BIOMASS HUB

As South Africa heads for a corn surplus this year, the head of the country’s Agricultural Business Chamber is calling for the Government to reconsider plans to build a biofuels industry.  As a result, farmers may be forced to export a large portion of the expected 4 million metric ton surplus at below the cost of production due to limited demand abroad.

A draft government biofuels incentive plan, released in 2007, has so far failed to attract investment into large commercial biofuels plants, Bloomberg reports.  Sasol Ltd., South Africa’s largest fuel supplier, Ethanol Africa Ltd. and National Biofuels Group Ltd. have canceled or delayed projects.

Chief Executive Officer John Purchase of the Agricultural Business Chamber stated in an interview:

The time is right now to relook at [the draft plan].  The government got it wrong.

The policy, Purchase adds, offered insufficient incentives and excluded corn, which rendered it a “disabling policy rather than an enabling policy.”

South Africa should process its corn into food or fuels in inland areas rather than ship it from the east coast port of Durban “at a great loss,” he said.  Logistics are probably “the biggest single factor adding costs to business,” said Purchase.

The Agricultural Business Chamber aims to represent the interests of all agricultural businesses in South Africa, with members ranging from corporate fruit producers such as Capespan Ltd. to equipment and service companies such as Afgri Ltd. and Absa Bank Ltd.

More on South Africa’s corn surplus and biofuels.