October Shipments of U.S. Ethanol Press Higher while U.S. DDGS Exports Slip

  • Thursday, 05 December 2019 14:11

Renewable Fuels Association

December 5, 2019

By Ann Lewis

U.S. ethanol exports picked up in October, increasing 13% to 112.8 million gallons (mg), according to data issued today by the government and analyzed by the Renewable Fuels Association (RFA). Gains made in sales to India and midsized customers more than offset a reduction in shipments to Brazil and, to a lesser extent, Canada.

Canada was the top destination for the sixth consecutive month, despite a 7% decrease to 30.0 mg (27% of total U.S. ethanol sales in October). Exports to India at 17.7 mg (16% of global U.S. ethanol sales) were the largest in four months. U.S. ethanol exports to Brazil weakened, moving 33% below September sales to 11.7 mg for a five-month low. Brazil’s harvest and processing of sugarcane continued at a robust pace in October, and the Brazilian government implemented a restriction on the volume that can enter the country duty-free through February under the tariff rate quota. U.S. shippers also sent sizable volumes to Honduras (a record 10.9 mg), South Korea (9.3 mg, +4%), Colombia (8.5 mg, up more than 6 mg from September), and the European Union (8.3 mg, -16%).

Total year-to-date exports of U.S. ethanol stand at 1.22 billion gallons. This implies an annualized export volume of 1.46 billion gallons which, if realized, would be the second-largest volume on record.

Shipments of U.S. undenatured fuel ethanol jumped in October, increasing 48% to 59.2 mg. Half of exports were destined for India (17.7 mg following zero the prior month) and Brazil (11.7 mg, -33%). Honduras imported its first batch of U.S. undenatured ethanol, coming in at a sizable 10.9 mg. Other key destinations included the United Kingdom (3.6 mg, +100%) and South Korea (2.8 mg, -41%). Notably, U.S. undenatured exports to Mexico nearly tripled to 2.2 mg (however, there were no U.S. denatured exports following two consecutive months of sales).

Sales of U.S. denatured fuel ethanol eased in October, declining 21% to 45.8 mg. Nearly two-thirds of exports crossed the border into Canada (28.5 mg, -8%). Other top importers included Colombia (7.2 mg following zero exports the prior month), South Korea (5.7 mg, +40% to a 12-month high), Peru (2.2 mg, -73%), and the Philippines (2.1 mg, -69%).

Exports of U.S. ethanol for non-fuel, non-beverage purposes bounced back from a two-year low, up 5.8 mg to 7.8 mg. American shipments of undenatured product were distributed among a handful of countries, to include Nigeria (2.9 mg), Japan (1.3 mg), and Canada (1.0 mg). Most of the denatured ethanol for non-fuel, non-beverage purposes landed in Canada (28.5 mg), Colombia (7.2 mg), and South Korea (5.7 mg).

Imports from Brazil remained elevated as the U.S. purchased 21.9 mg of sugarcane ethanol in October. The U.S. has imported more ethanol from Brazil than it has exported to the country for three of the last four months for which data has been reported. Total U.S. ethanol imports for the first ten months of the year stand at 163.9 mg—nearly triple the volume imported last year during the same period. In fact, year-to-date U.S. ethanol imports have already surpassed collective volumes entering our borders over the past three years.

U.S. exports of dried distillers grains (DDGS)—the animal feed co-product generated by dry-mill ethanol plants—declined 27% to an eight-month low of 759,979 metric tons (mt). However, shipments to Mexico climbed 8% to 147,471 mt as our southern neighbor once again secured its status as the top buyer of American DDGS (19% of our global market in October). Vietnam (117,897 mt, -6%), South Korea (69,633 mt, -25%), Indonesia (64,538 mt, -8%), Canada (42,071 mt, +4%), and Egypt (38,380 mt, +112%) rounded out our top markets. Notably, nearly all Latin American customers boosted imports of U.S. DDGS in October, collectively buying 24% more than the prior month. Total year-to-date exports of U.S. DDGS stand at 9.11 million mt. This implies an annualized export volume of 10.93 million mt.