Tension between Venezuela and Brazil over ethanol policy threatens to overshadow a regional energy summit being hosted by Venezuela this week, despite attempts to play down differences and promote Latin American integration.

Hugo Chávez, Venezuela’s president, has condemned a US push to boost ethanol production which Fidel Castro, of Cuba, has called “genocidal”. However, the US initiative last month resulted in an agreement between Washington and Brazil, the world’s largest producers of ethanol, to promote regional production of the fuel.

Mr Chávez, in an apparent U-turn after having spoken out in favour of ethanol in the past, now argues that the more land that is used for ethanol production – which is made from crops such as sugar cane and corn – the less there is for growing food to combat poverty.

“We have a huge territory, not only in Brazil, but in all South American countries, and Africa, which can easily produce oil seeds for biodiesel, sugar cane for ethanol, and food at the same time,” said Luiz Inácio Lula da Silva, Brazil’s president, on his weekly radio show, Breakfast with the President, on Monday. “I hope we can have an opportunity to discuss this issue” at the summit, he added.

Rafael Ramirez, Venezuela’s energy minister, said on Sunday that ethanol would be “just one” of the topics to be discussed.

Leaders from the region have gathered on Margarita Island off the Venezuelan coast in the Caribbean, where issues to be discussed include the construction of a 5,000-mile natural gas pipeline from Venezuela to Argentina, and an alliance modelled on the Organisation of the Petroleum Exporting Countries to promote “a fair price” for natural gas.

Progress may also be made on establishing a regional “Bank of the South”, whose main proponents, Venezuela and Argentina, are keen for Brazil to sign up to the project. The bank would provide an alternative to borrowing from the International Monetary Fund and the World Bank, to which Venezuela last week finally finished paying off the $3.3bn debt it owed when Mr Chávez was elected in 1998.

Mr Chávez’s confrontational politics has also generated friction with Chile, after members of the Senate there criticised his decision not to renew the licence of a privately owned opposition TV station.

Mr Chávez, who has near-total control over his own Congress, dismissed the Chilean senators as “fascists”, prompting President Michelle Bachelet’s response that “in democracy, different branches of government have the perfect right to make autonomous statements about anything they want”. Mr Chávez apologised to Ms Bachelet before her arrival at the summit in Venezuela, where she will also meet members of the opposition.

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