Aug. 28 (Bloomberg) -- Cargill Inc., the largest U.S. agricultural company, said Brazil faces a glut of ethanol in two years as supply grows faster than domestic demand.

An increase in ethanol exports to the U.S. would reduce the risk of oversupply, said Sergio Rial, the company's Latin America director. The U.S. currently imports only 3 percent of its ethanol consumption, he said during an interview in Sao Paulo today.

Cargill, based in Wayzata, Minnesota, is doubling sugar cane-processing capacity at its Cevasa plant to 1.2 million metric tons a year starting mid-2008, according to Rial. The plant will produce ethanol and most of the output will be exported, he said.

The company plans to make an acquisition in Colombia to expand output of cooking oil, he said. The purchase may take place as early as this year, Rial said.

To contact the reporter on this story: Romina Nicaretta in Sao Paulo at rnicaretta@bloomberg.net

Last Updated: August 28, 2007 08:23 EDT