That's roughly the distance from Iowa, the largest corn-producing state in the U.S., to Brazil, the largest ethanol producer in the world. Because of that relationship, ethanol news in Sao Paulo is often news in Des Moines, too.

Despite recent removal of the U.S. import tariff on ethanol and elimination of the 45-cent per gallon "blending credit" for using ethanol in gasoline, both of which improve Brazil's access to the U.S. market, little change in exports and imports is forecast by Rabobank economists. That includes continuation of the once-unimaginable situation that occurred in 2011, when Brazil became the largest importer of U.S. ethanol.

The key to Brazil's ethanol outlook is its sugarcane situation. Instead of corn, cane is the primary source of ethanol in Brazil. Cane production, however, is down and ethanol prices are up – even higher than U.S. prices. As a result, Brazil is expected to struggle to meet its domestic demand for ethanol, let alone be a major exporter.

Demand is growing as a result of a longtime government mandate that virtually all new vehicles be flex-fuel capable – able to run on fuels containing at least 85 percent ethanol (E85). Over 10 million such vehicles have already been sold in Brazil.

Andy Duff, head of Rabobank's Food & Agribusiness Research and Advisory Group-Brazil, says ending the U.S. ethanol import tariff represents a significant opportunity for Brazil in the medium and long term. "But in the next few years the focus of the Brazilian industry is likely to be keeping up with the growth of potential consumption in the domestic market, which will continue to rise as a result of expansion on the flex-fuel fleet."