Wednesday, September 17, 2008

Sugar and Ethanol feasability study in Belize


The feasibility study for an ethanol 200 proof, pilot project in Belize by the Belize Development Trust (NGO) bit the dust, over the cost of locally produced sugar.

In rough estimates, local brown sugar is sold $3.25 per 5 lb bag in Santa Elena Town. You can of course probably get a 25% savings if buying in bulk. For estimating costs, it is better to use the higher figure as a yardstick, so you have built in savings for a feasibility study. $3.25 Bz sugar per 5 lbs, means a cost of .65 cents a pound for brown sugar.

Sugar is fermented by adding yeast and then heated and distilled to make ethanol. Assuming a rough figure to cover transportation, labor and firewood, the idea is to estimate 3 times the cost of the sugar, to find an end production cost figure.

It takes 15 to 20 lbs of sugar to make a gallon of 200 proof ethanol. Again for safety calculations, we will assume 20 lbs of sugar to make 1 gallon of ethanol. Gasoline sells locally around $10 bz, give or take a dollar. Locally produced ethanol would cost 3 production costs x .65 cents per pound of sugar x 20 lbs for a gallon. Or a gallon of ethanol would cost $13.00 bz in brown sugar to make one gallon. Muliplied by 3 to get a round number for production costs, a gallon of ethanol would cost $39.00 a gallon.

Obviously gasoline in Belize is cheaper to buy in Belize , than making local ethanol? So how do the Brazilians do it? In order to be competitive, brown sugar locally produced would have to sell for .18 cents a pound or less. Taxes are not included in this study. Something is wrong somewhere in the cost of sugar produced in Belize ?


This comparative cost study actually points out that local brown sugar is overpriced by 350%. .18 cents it should be retail a pound versus .65 cents a pound we are buying at. We actually produce sugar here in the country. The government often talks about the inefficiencies in the sugar industry and the outside world does too. Obviously our comparative pricing here, from what it should be to what it is; indicates that the Belize Sugar Industry is woefully inefficient. So how to fix it? I would think the powers to be would be working on that, as there is OBVIOUSLY room to work with here. If one was going to use expertise and government intervention, I would go with legislation forcing improvements in the sugar industry to make us world competitive. Why should we sell our trade preferences to the EU to keep a bunch of inefficient people in jobs? Doesn't make sense. They have a grace period, let them CHANGE.

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