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U.S. Ethanol Exports Down in August as Imports Completely Dried Up

October 6, 2014

           

U.S. ethanol exports tallied 54.1 million gallons (mg) in August, down 14% from July and the second-lowest of the year. Year-to-date exports stood at 533.4 mg, implying an annualized total of 800.1 mg. Canada, the Philippines, and the United Arab Emirates (UAE) were top customers for U.S. product in August. Notably, federal data also showed China receiving U.S. fuel ethanol exports as well. Meanwhile, no fuel ethanol imports were reported, marking the first time in more than six years that not a drop of product entered the country. Denatured fuel ethanol accounted for 34 mg of August exports, with Canada receiving the lion's share (31.1 mg, or 92%). UAE was the only other notable importer of denatured fuel ethanol in August, taking in 2.5 mg. Undenatured fuel ethanol exports stood at 15.5 mg, with the Philippines (5.3 mg), China (3.3 mg), South Korea (2.6 mg), UAE (2.6 mg) and Mexico (1.7 mg) serving as top destinations. Some analysts speculated that exports to South Korea were actually industrial alcohol and may have been misclassified. Exports of undenatured ethanol for non-fuel, non-beverage uses also appeared to contain a misclassification in August. Total undenatured non-fuel, non-beverage shipments were recorded as 4.1 mg, a nearly 10x increase over normal monthly totals. Of the total, 3.6 mg went to Nigeria. Some believe the product sent to Nigeria was actually undenatured fuel ethanol, given Nigeria's history of importing that product. Exports of denatured ethanol for non-fuel use stood at 589,579 gallons. Ethanol imports were nil for the first time since June 2008. Year-to-date imports stood at 65.8 mg, meaning imports are on pace for less than 100 mg. Exports of distillers dried grains (DDG)—the animal feed co-product manufactured by ethanol dry mills—were surprisingly strong in August, totaling 1.09 million metric tons (mt). That's down 7% from July's record shipments, but well above expectations. China remained as the top destination for DDG exports in August, taking in 477,164 mt. While China maintained the top spot in August, exports to the country were down 14% from July and the lowest since April. Further declines are expected in the wake of recent Chinese actions that effectively place a moratorium on DDG imports from the U.S. Mexico (101,407 mt), Turkey (78,077 mt), Vietnam (61,625 mt) and South Korea (58,455 mt) were other leading destinations in August. Year-to-date DDG exports stood at 8.27 million mt, implying an annualized total of 12.85 million mt. If realized, this would be a new record for DDG exports. However, as noted above, reduced monthly export volumes are likely in the fourth quarter.