Yesterday the Deputy Minister of Agriculture raised the issue of transforming Ukraine’s multiple distilling plants into producers of bio fuel. Although the distilleries are running at 24% capacity, the issue is not that simple, as the country would need to adopt blended fuel standards and then enforce them. Further most Ukrainian distilleries pale in size to current ethanol production facilities in the US and Brazil. The Brazilian ethanol producers are profitable because they lower cost cane sugar as their base product. The US industry would collapse overnight if government subsidies were withdrawn because it’s based on more costly corn. Ukraine’s distilleries are based on wheat which is even more costly than corn. However if the purpose of the statement is to convince the country that another wasted subsidy program is needed for small scale, inefficient and corrupt state owned distilleries, well then we have no comment.

UkrAgroConsult