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October U.S. Ethanol Exports Continue Meteoric Rise While Import Market Fizzles

December 6, 2016


In October, the United States exported the largest monthly volume of ethanol since December 2011, according to government trade data released today and analyzed by the Renewable Fuels Association. Shipments totaled 131.6 million gallons (mg), up 32% over September and 69% higher than August exports. Brazil reappeared as our top customer in October as exports swelled by 25 mg over the prior month to 42.7 mg, capturing a third of U.S. shipments. October exports to Canada also grew by 25% as 35.0 mg (27% of the U.S. export market) crossed the border. Other large U.S. customers included India (16.5 mg, or 13%), China (10.6 mg, or 8%), the Philippines (6.3 mg, or 5%), Peru (4.8 mg, or 4%) and Mexico (3.87 mg, or 3%). Canada, Brazil and China continue to vie for top billing as the largest U.S. ethanol customer in 2016, accounting for two-thirds of all exports so far. Year-to-date exports stood at 825.5 mg, implying an annual total of 990.6 mg for calendar year 2016. Sales of undenatured fuel ethanol in October expanded by 36% to a record-breaking 70.0 mg. Brazil's purchase of 40.0 mg (57% of the U.S. export market) plus sales of 16.5 mg to India (24%) were significantly responsible for moving the needle. Larger volumes also headed to the Philippines (6.3 mg), Mexico (3.7 mg) and Saudi Arabia (2.5 mg). October exports of U.S. denatured fuel ethanol increased by 23% over the prior month to 54.2 mg. Canada (33.2 mg, or 61%), China (10.6 mg, or 19%) and Peru (4.8 mg, or 9%) were again the primary markets. Sales of denatured ethanol for non-fuel use rocketed to 5.4 mg in October with Nigeria reappearing in the marketplace (3.4 mg, or 64% of export sales) and Canada purchasing most of the remaining export volume (1.8 mg). October sales of undenatured fuel for non-fuel, non-beverage use increased by 9% to 2.1 mg, the highest level shipped since August 2014. South Korea imported an uncharacteristic volume for the second straight month, bringing in 1.8 mg (or 89% of exports). Mexico, Canada, the Philippines and China were other top customers. In October, for the second time this year, no fuel ethanol entered the United States. Year-to-date ethanol imports are just 33.7 mg—roughly half the volume imported by this point last year. At this rate, the U.S. is on pace to import about 40 mg in 2016. October exports of U.S. distillers dried grains with solubles (DDGS)—the animal feed co-product from dry mill ethanol production—experienced a slight increase over September, up 1% to 1,005,027 metric tons (mt). The current distribution of U.S. DDGS in the global marketplace reflects a distinct change in our customer base, with the top five customers splitting over half of the shipments fairly evenly. Exports to Mexico expanded by 7% to 131,672 mt (13% of the U.S. export market)—still lower than recent volumes but enough to overtake China as the largest U.S. customer. Shipments to China have been plummeting since June as another 25% month-on-month decrease meant exports totaled 124,713 mt (12%) and the lowest volume in nearly two years. Vietnam continued as a strong buyer with 121,961 mt of U.S. DDGS (12%), with the threat of new fumigation requirements not yet reflected in the data. Meanwhile Thailand increased its imports by 10% over September to 95,857 mt (10%)—more than double the volume entering the country at the start of the year. South Korea rounded out the largest customers of American distillers grains in October with 92,804 mt (9%). Other large customers in October were Turkey (63,864 mt), Spain (52,857 mt) and New Zealand (44,159 mt), all of which brought in unusual volumes of U.S. distillers grains. Through October, DDGS exports stood at 9.6 million mt, indicating an annualized total of 11.5 million mt.