Seven months into the 2017/2018 marketing year, the United States has exported nearly one billion gallons of ethanol, up 15 percent year-over-year and an indication of ethanol exports’ support for U.S. grain demand.
March ethanol exports exceeded 215 million gallons, the second highest monthly sales on record behind nearly 220 million gallons in February 2018. Both months far exceed the previous monthly export record of 178 million gallons in December 2011.
“The incredible cost-competitiveness of U.S. ethanol has enabled sales to break through tariffs and set new records despite numerous trade policy issues,” said Mike Dwyer, U.S. Grains Council (USGC) chief economist. “U.S. ethanol remains on track for another banner year of exports.”
Brazil remains the top importer of U.S. ethanol with 96 million gallons in sales in March 2018, bringing the total for the marketing year to almost 349 million gallons. These sales occurred despite a slow start following the implementation of a 20 percent tariff on imports outside a quota equaling approximately 40 million gallons quarterly.
“Last year, U.S. ethanol had duty-free access to the Brazilian market, resulting in higher-than-ever exports,” Dwyer said. “This year, U.S. ethanol is subject to a 20 percent out-of-quota tariff, yet is already up 12 percent year-over-year, further demonstrating that Brazil does not have enough ethanol to meet demand, as well as the economic advantage of U.S. supplies.”
“While sales to Brazil are expected to cool slightly due to the beginning of sugarcane harvesting season, the United States is on track to potentially set another record for ethanol exports to this market this marketing year.”
Other large year-over-year increases in demand also came from markets in which U.S. ethanol is subject to high tariff measures.
Sales to China are up 57 percent year-over-year to 77.4 million gallons thus far in the marketing year, making China the fourth largest export market for U.S. ethanol. However, it is unclear if the United States will export any additional ethanol to China this marketing year following the imposition of another 15 percent to the existing 30 percent tariff on the U.S. product.
Even with trade barriers in the European Union, U.S. ethanol exports have increased 749 percent compared to the same time the previous year, to 47.2 million gallons. Almost all of these exports are believed to be re-exported to other markets in the Middle East and Africa, not for consumption within the European Union.
Understanding the uniqueness of each international market is key to continued successful promotion of U.S. ethanol. The Council and its biofuels industry partners identify and analyze potential markets and develop strategies tailored to the culture and conditions of each while working closely with established customers who already gain economic, environmental and human health benefits from ethanol.
Learn more about the Council’s work on ethanol here.
About The U.S. Grains Council
The U.S. Grains Council develops export markets for U.S. barley, corn, sorghum and related products including distiller’s dried grains with solubles (DDGS) and ethanol. With full-time presence in 28 locations, the Council operates programs in more than 50 countries and the European Union. The Council believes exports are vital to global economic development and to U.S. agriculture’s profitability. Detailed information about the Council and its programs is online at www.grains.org.