Bloomberg News

S. African Biofuel Plan May Boost Sorghum Sixfold, Grain Says

December 12, 2011

(Adds blending level in fifth paragraph.)

Dec. 9 (Bloomberg) -- South Africa’s proposed mandatory blending of biofuels with gasoline and diesel may signal the start of a biofuels industry and boost sorghum output sixfold, an economist at the farmers’ body Grain SA said.

The government’s September release of draft blending rules may be “an early indication of a possible economic revival that is due for the sorghum industry,” Wessel Lemmer said in the Bothaville-based group’s monthly magazine. Blending could boost sorghum output to 950,000 metric tons by 2020, he said.

The nation produced 155,000 tons in the last season, according to the Crop Estimates Committee. The average annual crop was 226,000 tons in the five years to 2006, according to a report on the National Agricultural Marketing Council website.

“The successful development of the bio-ethanol industry, including the benefits for South Africa, may at last be underway,” Lemmer said.

A 2007 government proposal to establish a commercial biofuels industry was insufficient to attract investments. Sasol Ltd., South Africa’s largest fuel supplier, Ethanol Africa Ltd. and National Biofuels Group Ltd. canceled or delayed projects.

South Africa could introduce mandatory blending of as much as 10 percent “without compromising food security in terms of food availability,” he said. Prices will rise, he said. Sorghum is used to produce food and beverages, including traditional African beer.

Royal Dutch Shell Plc, BP Plc and Sasol are among the largest fuel producers in the country.

--Editors: Stephen Cunningham, Randall Hackley.

To contact the editor responsible for this story: Carli Lourens at clourens@bloomberg.net


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