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Brazil Stakes Claim in U.S. Ethanol Market Share while China Retreats; Falling DDGS Exports Find Legs in February

April 5, 2016

           

Exports of U.S. ethanol totaled 67.0 million gallons (mg) in February, down 23% from January’s 14-month high, according to RFA analysis of government data released today. Brazil overtook recent leaders Canada and China as the top destination for U.S. product in February, receiving 22.1 mg. Exports to Canada were 14.5 mg, up 6% over January volumes. Meanwhile, exports to China tallied at 8.9 mg, down from 29.4 mg in January. India re-entered the market with imports of 8.5 mg of U.S. ethanol, while the Philippines persisted as a top customer with 5.5 mg. Notably, South Korea was absent from the list of U.S. export recipients in February. Year-to-date exports stood at 154.1 mg, up a hair from the year-ago total of 153.9 mg. Denatured fuel ethanol shipments of 33.6 mg were just half of January levels and were destined primarily for three countries. Canada and Brazil increased their imports of denatured product to 12.9 mg and 9.5 mg, respectively, while exports to China shouldered most of the decline at 8.8 mg. Month-on-month exports of undenatured ethanol for fuel use increased 35% to 31.1 mg, as Brazil stepped up undenatured product imports to 12.5 mg and India took in 8.4 mg. The Philippines (5.5 mg) and the Netherlands (2.4 mg) were other top importers of undenatured fuel ethanol. Sales of ethanol for non-fuel, non-beverage use rebounded after last month’s capitulation, rising 15% to 2.2 mg. Most (78%) crossed our borders to Canada and Mexico. U.S fuel ethanol imports continued to languish. Only marginal volumes of foreign-produced fuel ethanol have entered the United States in 2016. In February, South Africa shipped 24,000 gallons while China sent 15,000 gallons. As a result, U.S. net exports were 67.0 mg. Total fuel ethanol imports so far this year are less than 1 mg. February exports of U.S. distillers dried grains with solubles (DDGS)—the animal feed co-product manufactured by dry mill ethanol plants—fell to 785,383 metric tons (mt). China retained its top position in the export market, taking in 210,559 mt, which equated to more than a quarter of total DDGS exports. The U.S. pared back DDGS exports to Mexico by 26%, returning to a more characteristic level of 145,025 mt in February. Other top customers were Vietnam (53,373 mt), Thailand (51,827 mt), Canada (37,370 mt) and South Korea (36,434 mt). Also, atypically large volumes were purchased by Turkey (33,699 mt), Indonesia (28,940 mt), Israel (26,916 mt), and Pakistan (12,498 mt), while recent importers Europe, the UAE and Kuwait disappeared from the marketplace. U.S. Ethanol Exports for 2016.02