World ethanol exports
To view the full chart, click here. Chart courtesy of USGC.
WASHINGTON, D.C., U.S. — Seven months into the 2017-18 marketing year, the United States has exported nearly one billion gallons of ethanol, up 15% year-over-year.

According to the U.S. Grains Council (USGC), 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, chief economist for the USGC. “U.S. ethanol remains on track for another banner year of exports.”

The USGC said 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% 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% out-of-quota tariff, yet is already up 12% 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% 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% to the existing 30% tariff on the U.S. product.

Even with trade barriers in the E.U., U.S. ethanol exports have increased 749% compared to the same time the previous year, to 47.2 million gallons, the USGC noted. 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 E.U.

“Understanding the uniqueness of each international market is key to continued successful promotion of U.S. ethanol,” the USGC said. “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.”