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U.S. Ethanol, DDGS Exports Rise in July

September 6, 2017


U.S. ethanol exports totaled 116.7 million gallons (mg) in July, up 26% from June shipments, according to government data released this morning and analyzed by the Renewable fuels Association (RFA). Canada and Brazil were again the top destinations for U.S. exports, combining to receive nearly two-thirds of total exports in July. Year-to-date U.S. ethanol exports to all destinations stood at 803.4 mg, indicating a record annualized export total of 1.38 billion gallons. This would account for approximately 9% of projected total U.S. ethanol production–an increase from the 5-year average of 5.7%. Ethanol exports to Canada jumped by 56% to 38.7 mg. This was the largest monthly volume shipped to Canada in 39 months (since April 2014). Ethanol exports also expanded to Brazil, increasing 62% to 33.9 mg. Through the first seven months of 2017, Brazil was the top market for U.S. ethanol exports, pulling in 39% (310.0 mg) of total ethanol exports. On a year-to-date basis, Canada has been the No. 2 market, capturing 24% of total exports. Impacts of Brazil's recent imposition of a tariff and tariff rate quote on U.S. ethanol likely will not be seen for a few months, as the implementation date for the 600 million liter tariff rate quota and 20% tariff was Sep. 1. Exports of undenatured fuel ethanol hit 58.7 mg in July, up 33% from June. Brazil imported 33.9 mg, nearly twice the June volume. Exports to India shot up 145% to 9.3 mg, while the Netherlands (4.3 mg), South Korea (3.4 mg) and Mexico (3.3 mg, nearly twice the June volume) rounded out the top five markets. Notably, Singapore lessened its market presence (1.4 mg, down 69%) while Jamaica stepped out of the arena completely after sizable imports in June (6.8 mg). Canada was again the top destination for denatured fuel ethanol, increasing 58% over the prior month to 37.8 mg and representative of more than two-thirds of the total denatured export market. The United Arab Emirates (UAE) purchased 12.0 mg after stepping out of the market since January 2017. Peru (2.4 mg), the Philippines (2.1 mg), and Colombia (1.8 mg) accounted for the bulk of remaining denatured fuel ethanol exports. Exports of denatured and undenatured ethanol for non-fuel, non-beverage purposes dropped to 1.9 mg–the lowest volume in 32 months. Canada imported 0.9 mg, while Colombia (0.5 mg), Mexico (0.2 mg), and South Korea (0.1 mg) were other top markets. For the third straight month this year, the United States recorded meaningful fuel ethanol import volumes. The U.S. brought in 4.1 mg of fuel ethanol in July from Brazil. Year-to-date imports total 24.3 mg and indicate an annualized total of 41.6 mg. Exports of dried distillers grains with solubles (DDGS)—the animal feed co-product generated by dry mill ethanol plants—were up 13% over June and hit a four-month high of 1.003 million metric tons (mmt) in July. Mexico remained the top customer for DDGS exports, receiving 199,376 mt—or nearly 20% of the total. Turkey imported 185,082 mt, nearly twice the volume that it received in June. South Korea (72,227 mt), Canada (59,771 mt), and Indonesia (56,534 mt) rounded out the top five markets. Meanwhile, shipments to China fell to their lowest level of the year at just 7,325 mt. Total year-to-date DDGS exports stood at 6.54 mmt through July, indicating an annualized total of 11.21 mmt.