Rudy Martin, editor of Latin Stock Investing newsletter, says Cosan will benefit from a sugar shortage.
Developing an internationally agreed mechanism to certify the environmental benefit would also help, says Mark Lyra, of Cosan.
In January, we recommended Brazilian sugar producer Cosan Ltd ( CZZ).
ExxonMobil ( XOM - news - people ), Cosan also makes money selling fuel at retail.
"Cosan is now the world's first integrated ethanol company, from the sugarcane fields to the fueling stations, " says Martin.
Thanks to last year's acquisition of Esso stations in Brazil from ExxonMobil, Cosan also makes money selling fuel at retail.
Growing ethanol demand--especially in Brazil, where the vast majority of new cars can run on 85% ethanol--should also help Cosan.
Publicly traded Cosan is one of the largest growers and processors of sugarcane and one of the largest producers of ethanol.
He spent 10 years in court fighting his family for control of Cosan, and has boosted its growth through acquiring other companies.
Since the MOU, though, Cosan shares have had their best two days all month, up 3.7% in the last two trading sessions.
FORBES: US Brazil Biofuels Talk Helps Cosan, But India Could Change That
For example, Cosan is into gasoline now because of Esso and Shell.
FORBES: US Brazil Biofuels Talk Helps Cosan, But India Could Change That
Brazilian oil sugar and ethanol company Cosan (CZZ) is off the list.
Oil prices have been rising all year, but Cosan, which sells the only oil-alternative that cars can run on, is up only 0.4%.
FORBES: US Brazil Biofuels Talk Helps Cosan, But India Could Change That
Sugar and ethanol giant Cosan ( CZZ) is up 47.8 percent and Ambev ( ABV) is up 24.7 percent over the last year.
The Codexis-Cosan-Shell partnership and the Amyris-Santelisa-Total one are the furthest along of the drop-in fuel businesses, but others are coming up on the rails.
ECONOMIST: Biofuels are back. This time they might even work
So despite higher incomes and more spending power, few of them are equipped to help Cosan develop better technologies at its ethanol processing plants.
FORBES: Brazil's Strengthening Currency Poses Competition Problem
This weekend, Cosan got a lift from US President Barack Obama.
FORBES: US Brazil Biofuels Talk Helps Cosan, But India Could Change That
But large cap exporters like mining company Vale or sugar exporter Cosan are highly sophisticated and well-hedged companies that have prices locked in well in advance.
FORBES: For Brazil's Currency, it's the Summer of 2008 Again
Industry heavyweights like Cosan (CZZ) are also researching ways to make fuel ethanol friendly for jet fuel, and turn sugarcane bagasse, the leafy waste of the cane stalks after they are crushed into sugar molasses, into second generation ethanol, as well.
FORBES: Brazil's BNDES Bank Offers $1 Billion to Ethanol R&D
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