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September U.S. Ethanol Exports Bounce Back after August Slump

November 10, 2015


DDGS Shipments Slip as China's Share of U.S. Export Market Falls Below 50%
U.S. ethanol exports in September recovered from a swoon in August, with shipments expanding 20% to 60.3 million gallons (mg), according to RFA analysis of government data released today. Canada held on as the top market, with 26.2 mg (44%) of ethanol crossing the border. Meanwhile, India imported 14.3 mg (24%), its highest level of imports since February. Other top importers included South Korea (8.5 mg), Peru (4.3 mg), Mexico (2.7 mg) and the Philippines (2.7 mg). Tunisia backed away from purchases in September after accounting for a quarter of the market last month, while exports to Brazil were close to zero. Total year-to-date U.S. ethanol exports are 624.9 mg–6% more than this time last year and already greater than total exports in 2013. Year-to-date shipments indicate an annualized rate of exports of 833 mg.
September exports of undenatured ethanol for fuel use rose 27% from August to 33.4 mg. India (14.3 mg), South Korea (8.5 mg), Peru (4.2 mg) and the Philippines (2.7 mg) pulled in most of the U.S. undenatured product for fuel use. Exports of denatured fuel ethanol increased 19% over August to 23.8 mg, with all but 38,000 gallons heading to Canada. Exports to Canada hit their highest point since September 2014. The United States exported 432,067 gallons of undenatured ethanol for non-fuel, non-beverage use, a 21% increase over August. Denatured ethanol for non-fuel, non-beverage purposes was the only product to see any downward movement over the prior month, down 23% to 2.6 mg. The largest volumes shipped to Canada (2.4 mg, or 92%), Mexico and the Netherlands. The California LCFS "ethanol shuffle" reappeared in September, as U.S. imports hit a 16-month high. The United States imported 24.9 mg of ethanol, almost 60% higher than August and the largest volume imported since May 2014. All of the 24.2 mg of undenatured ethanol imports originated from Brazil. The U.S. also imported 689,365 gallons of denatured ethanol in September, with 96% shipped from Spain and the remainder coming from South Africa and Canada. Year-to-date U.S. imports of ethanol now total 57.7 mg–quickly catching up to last year's cumulative volume at this point. In September, the United States realized its 25th straight month as a net exporter, albeit at a significantly reduced margin. September exports of U.S. distillers dried grains with solubles (DDGS)—the animal feed co-product manufactured by dry mill ethanol plants—continued their descent from the record high logged in July to the lowest volume shipped since April 2015. Four countries accounted for roughly three-quarters of the 1,108,582 metric tons (mt) of U.S. DDGS exports: China (484,535 mt), Mexico (140,338 mt), Viet Nam (101,335 mt) and South Korea (96,503 mt).These countries also represent the top four U.S. markets for cumulative year-to-date DDGS exports in 2015. On average, over the past 6 months China has been importing roughly 750,000 mt per month and making up about 64% of our DDGS export market. However, DDGS exports to China dropped 30% in August and another 26% in September, settling at a volume equal to just half of the June record high. On the bright side, total DDGS exports to the rest of the world in September remained fairly constant. Notably, Viet Nam significantly boosted its purchases of U.S. DDGS, as did Mexico, Canada, Thailand and Indonesia. This helped to offset waning markets like Egypt and Morocco and the fluctuations of other inconsistent market players. Total U.S. DDGS exports for the year are 9.6 million mt.