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U.S. Ethanol Exports Steady in September; DDG Exports Fall as Shipments to China Plunge 65%

November 4, 2014

           

U.S. exports of denatured and undenatured ethanol in September totaled 56.7 million gallons (mg), up 5% from August, according to RFA analysis of government data released today. Year-to-date exports stood at 590.1 mg—over 40% higher than exports during the same period last year—and implying an annualized pace of 787 mg for 2014. Canada received almost half (49%) of total U.S. ethanol exports in September, followed by the Philippines (14%), Netherlands (9%) and Spain (6%). India, the United Arab Emirates, and Mexico were other key destinations in September. September exports of denatured ethanol for fuel rebounded after a drop in August, increasing 12% to 38.1 mg. Shipments primarily moved to Canada (27.4 mg, or 72%), the Netherlands (4.0 mg, or 10%), and Spain (3.3 mg, or 9%). Shipments of undenatured ethanol for fuel use were 17.6 mg in September, with the Philippines the largest destination at 7.9 mg (45%) and India (2.8 mg, or 16%) and the United Arab Emirates (1.8 mg, or 10%) as other major players. September exports of denatured and undenatured ethanol for non-fuel, non-beverage use retreated from a record high in August (likely due to classification errors) to a more typical monthly level of 1.0 mg. The United States imported a paltry 644,535 gallons of fuel ethanol in September, up slightly from zero gallons in August. Lithuania (43%) and Germany (37%) shipped the majority of product, rounded out by France (18%) and China (2%). U.S. ethanol imports over the last 12 months have been averaging less than 8 mg versus an average of 51 mg the prior year. As a result, the United States has been a net exporter by a wide margin all year long, and September net exports stood at 56.0 mg. As expected, September exports of U.S. distillers dried grains—the animal feed co-product manufactured by dry mill ethanol plants—reflected a collapse of movements to China. As a result, total DDG exports fell 16% from August to 912,454 metric tons (mt)—the lowest point since February 2014. Despite a 65% reduction in DDG imports over the prior month, China still managed to hang on to its status as the leading destination with 167,325 mt (18% of total). While shipments to China plunged, exports to other markets ramped up in September, as four of the top six export markets (excluding China) saw their highest level of DDG imports this year. Mexico ranked second in September with 109,112 mt (12% share), while South Korea (94,409 mt), Turkey (86,296 mt) and Vietnam (61,954 mt) rounded out the top five customers. Notably, Ireland imported 48,930 mt—its largest monthly volume in more than three years. Year-to-date exports stood at 9.18 million mt, implying an annualized total of 12.2 million mt. If realized, this would be a new record for DDG exports; however, should DDG exports to China slow or halt for the remainder of 2014, the U.S. could still see a record-breaking year.