De-Anne Kelly, Federal Member for the Queensland sugar seat of Dawson, says Pat Byrne should know better, that Brazil may want Australia to produce ethanol, but that Brazil would compete with Australia such that its low-valued exchange rate would see Australian producers receive little from exporting ethanol to Japan (News Weekly, July 17, 2004).
It is Mrs Kelly who should know better. She is senior National Party leader and a Federal MP in Central Queensland, a huge coal-exporting region.
She should know that Japan has always been able to buy all its coal needs from Australia cheaper than from anywhere else in the world, but it doesn’t.
Resource-poor Japan has a policy of spreading its risk on vital resource imports, for example, by purchasing coal from a number of other countries at a higher price than it could buy from Australia.
Similarly, Japan can buy its oil cheapest from the Middle East, but because of instability in the region, it is looking to also buy much more expensive oil from Russia.
Therefore, there is little reason to believe that Japan would not pay a differential price for ethanol.
Brazil strategically developed its ethanol industry to supply the domestic market, a base platform for a huge export industry.
Mrs Kelly’s government has the ideal opportunity to establish an ethanol industry in Australia by mandating ethanol in fuel, and the further opportunity to turn ethanol into a new export industry for the country.
If the Coalition refuses to act on the issue, perhaps Labor will and then the sugar seats would become at risk.