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Tight Fuel Ethanol Supplies in Brazil Boost U.S. Exports

U.S. Fuel Ethanol exports are up sharply in the current marketing year, thanks in part to tighter fuel supplies in Brazil, which are resulting in higher U.S. imports. The change can be traced to an increase in the price of sugar in Brazil, which comes from stronger export demand for Brazilian sugar products. As a result of that higher demand, the country’s sugarcane refiners have shifted away from fuel ethanol and put most of their processing capacity toward sugar. Brazil has a mandate of 27 percent ethanol inclusion into gasoline, so the decline in output has left fuel providers short on supplies. The shortfall in Brazil has led to an increase in ethanol imports from America, where corn is much more abundant. U.S. shipments of ethanol to Brazil first began to rise in October of 2016. From October 2016 through February 2017, fuel ethanol shipments to Brazil surged 547 percent, compared with the same period a year earlier.

In addition, U.S. shipments to the world rose 65 percent, and exports to Canada, also a major buyer, rose by 57 percent.

Source: NAFB News Service

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