Market Glut Depresses Ethanol Prices
October 1, 2007
• by Staff
NEW YORK --- Since May, the average national ethanol price on the spot market has fallen 30 percent, the New York Times reported.
This decline, which has escalated sharply in recent weeks, is due to an ethanol market glut. The infrastructure to distribute ethanol hasn't kept pace at all with the construction of ethanol distilleries.
"The end of the ethanol boom is possibly in sight and may already be here," Neil E. Harl, an economics professor emeritus at Iowa State University, told the Times. "This is a dangerous time for people who are making investments."
Some companies have already scrapped plans for new ethanol plants and for plant expansions, the Times reported.
Government support is expected to keep output growing, but ethanol oversupply is raising questions about the industry's long-term future.
Originally posted on Fleet Financials