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Ethanol Exports Fall to Nine-Month Low in May; China Drives U.S. DDGS Export Expansion

July 6, 2016


U.S. ethanol exports totaled 55.7 million gallons (mg) in May, a considerable 42% drop (40 mg) from April, according to government data released and analyzed by the Renewable Fuels Association today. Monthly ethanol exports have dipped lower only twice over the past two years. Canada received 21.5 mg of U.S. ethanol in May, displacing China as the top destination. Still, China was a close second, bringing in 19.6 mg of U.S. product. Together, the two countries accounted for three-fourths of all U.S. ethanol exports in May. Year-to-date ethanol exports reached 400.7 mg, meaning the industry is on pace to ship 962 mg in 2016. May exports of U.S. denatured fuel ethanol fell 16% from the prior month to 31.0 mg. Most denatured product (19.4 mg, or 62%) crossed the border to Canada or was shipped to China (10.0 mg, 32%), with the remainder heading to Peru (1.7 mg). May exports of U.S. undenatured fuel ethanol sank 58% from April to 22.0 mg. Top customers were China (9.7 mg, or 44%), Brazil (6.0 mg, or 27%), South Korea (2.5 mg, or 11%) and Mexico (1.7 mg, or 8%). Several regular export markets with large volumes in April (e.g., India, the Philippines) were absent from the ledgers in May. Sales of denatured ethanol for non-fuel use in May retracted to a fairly normal level of 2.2 mg after lunging to a near-term high in April. With Nigeria stepping back out of the marketplace, Canada captured nearly all of the volume at 2.1 mg. Sales of undenatured ethanol for non-fuel, non-beverage use was lower at 495,914 gallons. Mexico, South Korea and Taiwan together accounted for three-fourths of the total volume of undenatured industrial. The first noticeable volumes of imports entered the United States in May, with 1.8 mg of undenatured ethanol coming from Guatemala and less than 20,000 gallons from the UK and France. Year-to-date fuel ethanol imports are just 1.9 mg, putting the U.S. on pace to import 4.6 mg in 2016. U.S. distillers dried grains with solubles (DDGS)—the animal feed co-product manufactured by dry mill ethanol plants—experienced sizable export growth in May with the third month-on-month increase. DDGS exports grew 20% to 1.06 million metric tons (mt), largely due to the doubling of export volumes to China over April levels. China imported 291,825 mt of DDGS in May, or 27% of the total. Exports to Mexico increased as well with 158,702 mt sold in May, while Turkey cut imports by a third to 105,584 mt. The remaining half of the U.S. DDGS exports in May were spread across 29 countries, with the largest volumes moving to Vietnam (91,850 mt), South Korea (55,019 mt), Thailand (51,033 mt) and Canada (42,521 mt). Year-to-date DDGS exports of 4.4 million mt indicate an annualized total of 10.6 million mt.