Government data published yesterday showed U.S. ethanol exports slumping to just 74 million gallons in July, down 38 percent compared to the same month last year and the lowest total for July in six years. The escalation of trade barriers and the impacts of COVID-19 have caused year-to-date ethanol exports to slide 9 percent compared to the same period last year and 22 percent compared to the same period in 2018.
After regularly serving as top export markets in recent years, virtually no U.S. ethanol was shipped to Brazil, China, or Colombia in July due to the existence of unjustified trade barriers in those countries. Combined export volumes to those three countries hit a peak of 129 million gallons in March 2018, but dropped to a trickle of just 34,000 gallons in July 2020. The dearth of exports to those markets emphasizes the need for the U.S. government to take decisive action to remove barriers and ensure a level playing field for global ethanol trade, according to the Renewable Fuels Association.
“As the July export numbers show, the spread of protectionist trade barriers around the globe is having a very real impact on demand for U.S. ethanol,” said RFA President and CEO Geoff Cooper. “And the situation is going from bad to worse, as just this week Brazil eliminated its tariff-free quota for U.S. ethanol and will now charge a 20% tariff on all U.S. ethanol imports. These tariff and non-tariff barriers must be addressed and countered with measures that ensure a fair and level playing field for ethanol trade. The persistent ethanol trade disputes involving key markets like Brazil, China, and Colombia are taking a serious toll on U.S. ethanol producers who are already contending with the economic fallout from COVID-19. More needs to be done to restore open and healthy ethanol trading relationships with our customers around the globe.”