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Ethanol Exports Increase as More Countries Fight Pollution
USAgNet - 12/08/2016

U.S. ethanol exports continue to make gains this year as worldwide demand for the fuel expands and diversifies. In the 2015-16 marketing year, U.S. ethanol exports reached 868 million gallons, the second largest on record, making the U.S. on track to be the world's leading ethanol exporter for a third year in a row. This comes as more countries mandate the blending of ethanol with gasoline for its high octane and low-carbon advantages in reducing greenhouse gas (GHG) emissions and improving air quality.

"The best way to enhance farmer profitability is to create new demand for corn through value-added products such as ethanol," said Iowa Corn Exports and The Grain Trade Committee Chair Wayne Humphreys, a farmer from Columbus Junction. "With one out of every 16 gallons produced in the U.S. exported, ethanol exports have become extremely important to Iowa farmers' profitability."

The U.S. Grains Council (USGC), the driving force behind this success, works with the Iowa Corn Promotion Board (ICPB), Growth Energy, the Renewable Fuels Association, the U.S. Department of Agriculture's Foreign Agricultural Service (USDA FAS) and others to develop markets and enable trade for this renewable, clean-burning fuel.

The market for U.S. ethanol products has become more diversified over the past two years, per a report issued in August by FAS. Lower ethanol prices and expanded market demand sustained higher export volumes despite this year's lower oil prices and a stronger dollar.

The Philippines, India, Peru and South Korea join Canada, Brazil and China as top U.S. ethanol importers in the 2015/2016 marketing year. In 2015/2016, Canada remained the top importer of U.S. ethanol at 234 million gallons, driven by a national blend mandate and convenient access to U.S. production.

Large volumes of U.S. ethanol were exported to China for the first time in 2015. After importing just 14 million gallons in 2014/2015, China brought in 190 million gallons in 2015/2016 because imported ethanol was cheaper than domestic supplies.

Brazil, previously one of the U.S.'s chief ethanol export competitors has been steadily reducing their ethanol exports. High sugar cane prices, the feedstock used to make Brazilian ethanol, and the country's fuel blend mandate has created a significant decline in the county's ethanol exports. Brazil imported 122 million gallons of U.S. ethanol in 2015/2016, making it the third largest market.

India remains a rising and major importer of U.S. ethanol, consuming more than 66 million gallons in 2015/2016. The 5 percent blend mandate in India has not been met due to insufficient domestic fuel ethanol supplies. The country has a goal of 20 percent blending by 2017, making increased ethanol imports a necessity if they are to reach the blending target.

Domestic ethanol production in the Philippines (using sugar cane and molasses as feedstocks) has been unable to meet their country's 10 percent blend mandate, resulting in the need for imports. In the 2015/2016 marketing year, the Philippines imported more than 63 million gallons.


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