corn prices ho wing tung janice. what does corn make? food commodities food grain for breeding by...

Corn pricesHo Wing Tung Janice

What does corn make?• Food commodities

• Food grain for breeding

• By product: Bioethanol

How to make biofuel?

• Filtering• Removing of water• Titration• Preparation of sodium methozide• Heating and mixing• Settling and separation

Bioethanol

• A kind of alcohol made from corn, of high quality

• Commonly found in Brazil

• Blended into gasoline as a fuel enhancer

• Advantages• Increase car’s thermal efficiency• Reduce pollution

• Tax credit, subsidies are provided by US government

• Disadvantages• Smaller energy density and output level (2/3 of petrol)• Need a bigger tank to fully substitute petrol• Easy to erode pipelines

What affects prices of corn?

Prices of Corn

Highest: $445.75 Lowest: $300.5

Emerging trends

1. Global Warming

• Alternatives of gasoline and petrol

• Bioethanol can be a more environmentally friendly

• Higher demand for bioethanol

Prices of corn

2. Second generation biofuel

• Aim:

• The Energy Independence and Security Act 2007

• Increase 3x usage of biofuel in 10 years with advanced biofuel

• Frees the industry from reliance on a single commodity

• Avoid threatening food supply and biodiversity

Categories

Second Generation Biofuel

• Derived from non-food commodities

• E.g. woodchips, industrial waste, leaves

• Less greenhouse gas emission

• Higher energy output

• Substitute of corn-biofuel with better performance

Prices of corn??

Short term (3-5 years)

• Corn prices

• Target set by America’s Environmental Agency

• High fixed cost to invest in non-food biofuel

• Food-biofuel still dominates with raising demand

Long Term (5-10 years)

• Joint ventures emerge

• US government grants and loans to investors

• Oil companies are joining the ventures

• Solazym and Chevron

• BP and Dupont

• Prices of corn will substantially

Q & A

Emerging trends

European Union’s goal of reaching 10% of transportation fuel as biofuel

Shell and Cosan team up on ethanolGeneration gameA champion of futuristic biofuels embraces the old-fashioned kindFeb 4th 2010 | SÃO PAULO |

America's biofuel muddleComing up emptyAmerica will have trouble meeting its ambitious goals for biofuelsMar 25th 2010 | CHICAGO

Joint ventures

Higher targets