Foreign investors are not just snapping up Brazilian farmland – they are taking a bigger stake in sugar operators too, tripling their participation within three years.
The proportion of Brazilian cane ethanol mills backed with foreign capital has jumped to 22% from 7% in 2007-08, according to research by consulting group Dextron Management.
The list includes four of the five biggest operators.
And the trend looks set to continue, with US-based Archer Daniels Midland, the UK's BP and Hong Kong-based Noble Group considering expansions in the sector.
'Future is very good'
The report comes a week after Bunge, the US oilseeds giant which spent more than $1bn buying Brazilian sugar mills earlier this year, revealed last week it was aiming to raise more than $100m for a fund which would buy land for sugar production.
"Domestic demand in Brazil for ethanol has been growing at a very rapid pace," Jacqualyn Fouse, the Bunge financial officer, told an investors' conference.
And, with the sweetener viewed as more economic for ethanol production than corn "we think long term … the future for sugar-based ethanol is very good", she said.
Almost all cars in Brazil can operate on ethanol as well as petrol, and the country is proposing a 570km-long pipeline to transport ethanol from production regions to Sao Paolo and the port of Santos, and avoid the high costs of road transportation.
A spate of foreign purchases of Brazilian farmland, while more straightforward than in many other countries, has attracted some local criticism, prompting the country's senate to consider restrictions on buyers from abroad.
However, the Dextron report credited foreign investment in cane ethanol for fuelling the modernisation and expansion of the sector.
Other companies which have invested in the sector include France's Louis Dreyfus, Anglo-Dutch Shell and Japan's Sojitz.Targets in Brazil were of varying size, from giants such as Cosan, which Shell has invested in, to smaller operators such as Tropical Bioenergy, which BP has backed.