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U.S. Swaps Ethanol with Brazil in June, as China Exits the Market

August 5, 2016

           

U.S. ethanol exports totaled 46.4 million gallons (mg) in June, down 17% from May and the lowest since July 2013. According to government trade data released this morning and analyzed by the Renewable Fuels Association, Canada (20.4 mg) was the top destination for U.S. product in June, followed by Brazil (10.1 mg), Peru (5.7 mg), and the Philippines (4.1 mg). Notably, China did not import any U.S. ethanol in June, after averaging 25.9 mg of imports per month between January and May. Halfway through the year, exports stood at 447.1 mg, indicating an annualized total of nearly 900 mg. Shipments of undenatured fuel ethanol tallied 23.6 mg in June, with Brazil accounting for 10.1 mg. Peru (5.7 mg), the Philippines (4.1 mg), Mexico (2.2 mg), and the Netherlands (1.0 mg) rounded out the top five destinations. Exports of undenatured product to both Brazil and Peru were the highest volumes of the year to those destinations. Denatured fuel ethanol exports totaled 20.6 mg, down 34% from May. Canada was the top market for denatured fuel ethanol, taking in the lion's share at 18.6 mg. Jamaica (1.3 mg) and Colombia (0.6 mg) were the only other markets to receive measurable volumes of denatured fuel ethanol in June. Exports of denatured and undenatured ethanol for non-fuel, non-beverage use stood at 2.2 mg in June, with Canada receiving the bulk of that product (1.8 mg). As for U.S. ethanol imports, June saw the first sizeable volume of inbound shipments of the year. The U.S. imported 10.5 mg of fuel ethanol in June, 99.7% of which came from Brazil (notably, the 10.5 mg of imports is nearly equivalent to the 10.1 mg of U.S. exports to Brazil). Through the first half of the year, total U.S. fuel ethanol imports stood at just 12.4 mg. Meanwhile, exports of distillers dried grains with solubles (DDGS)—the animal feed co-product from dry mill ethanol production—remained strong in June, with 1.005 million metric tons (mt) shipping out. June totals were down 5% from May, but still well above the six-month average. China was the leading market for U.S. DDGS exports, receiving 370,898 mt. That is the highest volume to China in nine months and nearly triple the total from just two months earlier in April. Mexico (159,444 mt), Vietnam (95,484 mt), Turkey (60,364 mt), and South Korea (59,409 mt) were other top export markets. Through June, DDGS exports stood at 5.36 million mt, implying total annual shipments of 10.72 million mt.