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Trade Monitor
Reinvigorated U.S. Ethanol Export Market Vaults to New Record High

April 5, 2018

Trade, Exports


U.S. ethanol exports totaled a record 218.7 million gallons (mg) in February—up 148% from January—and nearly 50 mg more than the previous record set in December 2011, according to government data released this morning and analyzed by the Renewable Fuels Association (RFA). It is widely believed by trade sources, however, that February’s export data includes some volume that was actually exported in late January (particularly to China).


U.S. exporters sent a record 103.2 mg of ethanol to Brazil—besting the previous monthly high to Brazil set more than six years ago. February marked the fourth straight month that Brazil was the top U.S. export customer, taking nearly half of all ethanol exports. According to the data, China increased its purchases of U.S. ethanol to a 22-month high of 33.1 mg. Canada and Singapore captured the third and fourth spots at 22.0 mg and 14.8 mg, respectively. These four markets netted 80% of all U.S. ethanol shipments, with the remaining volumes scooped up by 30 countries. Year-to-date exports stood at 307.0 mg through February, marking the strongest start in history.


China was the third-largest market for U.S. ethanol exports in 2016, accounting for nearly a fifth of total exports; however, shipments nearly disappeared last year as the country imposed its first U.S. ethanol import tariff. While U.S. ethanol shipments to China have resumed in recent months given its overwhelming cost competitiveness, China’s imposition this week of an additional 15% tariff on top of the existing 30% duty will likely put a stop to further shipments in the near term.


 Shipments of undenatured fuel ethanol in February expanded by an astounding 183% to 135.6 mg, with all the largest markets boosting U.S. imports. Sales gains in Brazil equaled 139% over January at 97.3 mg (72% market share). China (11.1 mg), India (8.9 mg), the Philippines (8.6 mg), South Korea (3.6 mg), and Mexico (3.1 mg) were other top markets for undenatured fuel ethanol in February.


Exports of 80.3 mg of U.S. denatured fuel ethanol topped January levels by 50 mg, up 165%. Purchases by China (21.9 mg) and Canada (21.3 mg) accounted for more than half of all exports, with Singapore (13.4 mg), the United Arab Emirates (9.4 mg), and Brazil (5.9 mg) taking in sizeable volumes.


Overseas sales of denatured and undenatured ethanol for non-fuel, non-beverage purposes retreated 73% in February, returning to more typical volumes of 1.1 mg and 1.6 mg, respectively. Most denatured product for non-fuel use headed to Canada (0.8 mg) and South Korea (0.2 mg), while Nigeria stepped away from the market following 4.1 mg of U.S. shipments in January. Colombia (0.7 mg), Sweden (0.3 mg), South Korea (0.3 mg), and Mexico (0.2 mg) purchased the bulk of American undenatured ethanol for non-fuel purposes.


On trend with 2017, the first two months of 2018 were absent of any fuel ethanol imports.


 Exports of dried distillers grains with solubles (DDGS)—the animal feed co-product generated by dry mill ethanol plants—slipped 7% to the lowest volume in six months at 835,707 metric tons (mt). While DDGS exports lifted in the top three markets of Mexico (182,411 mt, up 1%), Vietnam (94,206 mt, up 62%), and South Korea (80,466 mt, up 10%), exports pared back in Thailand (70,912 mt), Canada (50,103 mt), Turkey (48,769 mt), and Indonesia (42,772 mt). Year-to-date exports stand at 1.73 million mt; if realized, annualized exports would reach 10.4 million mt.


Ann Lewis