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Trade Monitor
September Sales of U.S. Ethanol and DDGS Decline Yet Remain Robust; U.S. Imports of Brazilian Ethanol Chip Away at Net Exports Margin

November 6, 2019

Trade, Exports


November 5, 2019 – U.S. ethanol exports relaxed in September, decreasing 18% to 100.3 million gallons (mg), according to data issued late today by the government and analyzed by the Renewable Fuels Association (RFA). Sales were mixed with exports pressing higher among most major markets.


Canada was the top destination for the fifth consecutive month, scaling 4% higher to 32.4 mg. Exports to Brazil climbed 3% to a three-month high of 17.6 mg. In a departure from recent norms, sales to these two markets alone accounted for half of U.S. ethanol exports in September. U.S. sales were also strong in South Korea (8.9 mg, +55%), Peru (8.1 mg, +37%), the Philippines (6.9 mg, +224%), the United Arab Emirates (6.7 mg, +165%), the Netherlands (6.1 mg, +65%), and Norway (3.2 mg, a 70-month high). Total year-to-date exports of U.S. ethanol stand at 1.10 billion gallons. This implies an annualized export volume of 1.47 billion gallons which, if realized, would be the second-largest volume on record.


September sales of U.S. denatured fuel ethanol rebounded from a drop in August, rising 17% to 58.3 mg. Canada remained the top customer, increasing its denatured imports by 4% to 30.8 mg (representing over half of September shipments). Other top importers included Peru (8.0 mg, +36% and the largest volume since Feb. 2012), the Philippines (6.9 mg, +224%), the United Arab Emirates (6.7 mg, +165%), and South Korea (4.1 mg, +3%).


Shipments of U.S. undenatured fuel ethanol tapered off in September, decreasing 35% to 40.0 mg. However, top customer Brazil expanded its imports by 3% to 17.6 mg (representing 44% of the global market). Other key destinations included the Netherlands (6.1 mg, +65%), South Korea (4.8 mg, +181%), Norway (3.2 mg), and Colombia (2.1 mg). Notably, Cyprus was a first-time buyer of American undenatured fuel ethanol, with 2.0 mg in sales.


Exports of U.S. ethanol for non-fuel, non-beverage purposes scaled back to 2.1 mg, the lowest volume since Dec. 2017. U.S. shippers exported 1.8 mg of undenatured product (down 3.1 mg from August, or -63%), with the bulk distributed between Canada (0.8 mg) and Saudi Arabia (0.6 mg). Most of the denatured ethanol for non-fuel, non-beverage purposes landed in Canada.


The U.S. imported ethanol from Brazil for the fourth consecutive month, with purchases of 58.3 mg. This marks the largest monthly volume of foreign ethanol to enter our borders in over six years (since Aug. 2013). Total year-to-date imports stand at 142.1 mg—quadruple the volume imported last year during the same period. Consequently, the U.S. is on pace to let in more foreign ethanol in 2019 than the last three years combined.


U.S. exports of dried distillers grains (DDGS)—the animal feed co-product generated by dry-mill ethanol plants—moderated from August’s rally, decreasing 6% to 1.05 million metric tons (mt). Shipments to Mexico fell 24% to a six-month low of 136,886 mt, yet the country remained the top destination for U.S. DDGS in September. Vietnam (125,257 mt, +12%), Turkey (94,981 mt, +546%), South Korea (93,283 mt, -17%), and Japan (89,264 mt, +249% and a new record high) round out the top five markets. Year-to-date exports of U.S. DDGS stand at 8.35 million mt. This implies an annualized export volume of 11.13 million mt.



Ken Colombini