U.S. Ethanol Shipments Rebound as Brazil and Canada Vie for the Top Spot; DDGS Shipments Push Higher

  • Thursday, 09 August 2018 10:48

Renewable Fuels Association

August 8, 2018

By Ann Lewis

U.S. ethanol exports totaled 151.5 million gallons (mg) in June—up 65% from the prior month and in line with the monthly average for 2018, according to government data released last week and analyzed by the Renewable Fuels Association (RFA). Brazil resumed its position as the largest export market with 35.7 mg (24% of total ethanol exports), nearly quadrupling its May volume. Canada was close on Brazil’s heels with 33.5 mg imported in June—up 5%—and securing 22% of the U.S. ethanol export market.

Seven of the top 10 export markets saw growth in June. Exports to India surged to 26.7 mg—more than four times the volume shipped in May and its second-largest monthly imports on record. For the second straight month, shipments to the Philippines nearly doubled, surging to a record high of 19.1 mg in June (13% market share). The Netherlands imported 11.4 mg for its largest volume in six months. A record 4.3 mg was exported to Malaysia, and Jamaica boosted its offtake to 3.1 mg. Among markets that saw a decrease in export volumes were South Korea (6.8 mg, down 19%), Colombia (3.7 mg, down 27%), and Mexico (1.9 mg, down 47%). Notably, after 27 straight months as a customer, Peru stepped out of the U.S. ethanol export market altogether following a record buy (12.7 mg) in May. Year-to-date U.S. ethanol exports stand at 927.7 mg, implying a record annualized total of 1.86 billion gallons.

Shipments of U.S. undenatured fuel ethanol in June rose 159% to 80.5 mg. Brazil was the top undenatured fuel ethanol customer at 32.6 mg (41% of all shipments). This was a 246% increase over May, but still only coming in at about half of its April purchases. India re-entered the marketplace with its strongest demand of the year, taking 18.8 mg (23% share). Record volumes of undenatured product were shipped to the Netherlands (9.8 mg, 12%) and Malaysia (3.7 mg, 5%). The Philippines—May’s top undenatured fuel customer—decreased its purchases by 13% to 8.2 mg (10%). These five largest markets accounted for over 90% of the U.S. undenatured fuel ethanol market in June.

June exports of U.S. denatured fuel ethanol expanded 15% to a three-month high of 58.3 mg. Top customer Canada took in half of all U.S. denatured fuel product at 30.4 mg. The Philippines entered the market after a quiet six months with 10.9 mg (19% market share). Sizable volumes also went to Colombia (3.7 mg, down 16%), Jamaica (3.1 mg, for a 22-month high), and Brazil (3.0 mg).

June sales of ethanol for non-fuel, non-beverage purposes grew 25% to the largest monthly volume on record. American shippers more than doubled exports of denatured non-fuel product at 12.3 mg, besting the record set seven months ago by over 3 mg. India accounted for two-thirds of the export market at 7.9 mg. Canada decreased its purchases by 9% to 2.9 mg, losing its grip as our largest customer for the first time in nine months. Most of the remaining denatured, non-fuel exports headed to South Korea (1.4 mg). Shipments of undenatured non-fuel product winnowed down 95% to just 335,031 gallons, the lowest volume in 14 months. Top importers were South Korea and Mexico.

June was essentially absent of any fuel ethanol imports. As a result, just 1.6 mg of Brazilian ethanol has entered the United States in the first half of 2018, according to the monthly data.

American exports of dried distillers grains with solubles (DDGS)—the animal feed co-product generated by dry mill ethanol plants—improved by 4% to reach a 16-month high of 1.035 million metric tons (mt) in June. Exports shipped south of the border to Mexico increased 28% to 186,989 mt (18% market share). That volume was enough to surpass Turkey as the top customer; still, Turkey imported 175,030 mt (17% market share). Shipments to South Korea (103,357 mt) and Vietnam (78,157 mt) contracted by 17% and 13%, respectively. Indonesia (64,614 mt) and Thailand (63,909 mt) were other sizable markets. Year-to-date exports stand at 5.67 million mt, implying an annualized total of 11.33 million mt. If realized, distillers grains exports would yield a three-year high.

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