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Trade Monitor
Strong Global Demand for U.S. Ethanol and DDGS Continues into November

February 8, 2019

Trade, Exports


U.S. ethanol exports through November 2018 reached 1.56 billion gallons, up 31% from the same period a year earlier and already a calendar-year record. Exports remained robust in November although volumes for the month decreased 16% to 147.9 million gallons (mg), according to government data released this morning and analyzed by the Renewable Fuels Association (RFA). In a departure from recent trends, sales were heavily concentrated in just three countries accounting for nearly three-fourths of all U.S. ethanol shipments in November. Brazil imported 51.2 mg, representing 35% of total U.S. export sales. While this was 3.2 mg lower (-6%) than October volumes, it was enough to secure Brazil’s position as the top U.S. ethanol customer for a second straight month. Canada decreased its imports of American ethanol by 8% to 28.4 mg, the lowest volume in seven months but still 19% of total ethanol shipments in November. Volumes exported to India were a solid 28.1 mg (19% of U.S. ethanol exports), slipping just 3% from a record offtake in October. Mexico imported a record 4.8 mg, up 144% for the month.


The Netherlands (8.2 mg, down 21%), South Korea (6.2 mg, down 20%), and Spain (4.3 mg, up 156% to a 13-month high) were other top markets. Notably, after purchasing 6.2 mg in U.S. imports in October, the Peruvian market essentially disappeared with the implementation of countervailing duties on U.S. ethanol by their government in November.


November exports of undenatured fuel ethanol were 90.5 mg, an increase of 10.9 mg (14%). Brazil purchased 51.2 mg (up 10 mg or 23%), representing 57% of our undenatured export market while exports to India at 14.6 mg were down 10 mg (41%). Expanded volumes were shipped to the Netherlands (8.2 mg, up 7 mg), Mexico (4.8 mg), Spain (4.3 mg), and South Korea (2.8 mg) in November while the Philippines (2.4 mg) cut imports in half.


American producers shipped 41.0 mg of denatured fuel ethanol in November, down 55% from the October record (91.4 mg) and the smallest volume in ten months. Most of the global export market contraction can be attributed to quiet trading in six major markets (Brazil, the Netherlands, the United Arab Emirates, Peru, Oman, and the Philippines) that were responsible for cumulative imports of over 46 mg in October. Canada captured two-thirds of our denatured fuel export market with 25.7 mg of product, despite a 9% decrease from prior month sales. India’s November purchases were up 70% for a 13-month high of 7.5 mg, accounting for 18% of our denatured fuel ethanol market. Other top customers were Colombia (2.6 mg), South Korea (2.5 mg), and Jamaica (2.2 mg).


November sales of American denatured non-fuel ethanol skyrocketed to a record 12.3 mg, up from 2.5 mg in October. India re-entered the market to purchase 6.0 mg (48% of total sales), Nigeria also stepped back in with 3.6 mg (29% share) in sales, and 2.6 mg crossed into Canada (up 8%). November U.S. exports of undenatured non-fuel product more than doubled to 4.1 mg. The majority of product shipped to Saudi Arabia (1.7 mg), Japan (1.3 mg), and South Korea (0.9 mg).


The United States imported 9.9 mg of undenatured ethanol from Brazil in November. Total year-to-date U.S. ethanol imports stand at 66.9 mg—essentially all sourced from Brazil. This is 13% behind last year at this time.


November exports of U.S. dried distillers grains with solubles (DDGS)—the main animal feed co-product generated by dry mill ethanol plants—were 1.017 million metric tons (million mt). While shipments tapered slightly (-0.2%), November was the sixth straight month that global demand breached 1 million mt. Mexico purchased 174,465 mt (up 9%) to capture 17% of the market. U.S. shippers sent 166,008 mt of DDGS to Vietnam, up 47% and the largest volume in nearly two years. Shipments of 97,600 (up 1%) entered Indonesia to set a new monthly record. U.S. DDGS export volumes to some key markets contracted, although demand remained robust: Thailand (79,603 mt, -14%), South Korea (71,699 mt, -12%), Canada (51,787 mt, -18%), and the United Kingdom (48,598 mt, -33%). Year-to-date U.S. DDGS exports are 10.99 million mt, implying an annualized total of 11.99 million mt. If realized, U.S. distillers grains exports would capture the second-largest annual volume on record.



Ann Lewis

Ann Lewis is a Research Analyst at RFA.