US ethanol exports
Source: USDA-FAS Global Agricultural Trade System
WASHINGTON, D.C., U.S. — The market for U.S. ethanol products has become more diversified over the past two years, according to a report issued Aug. 8 by the Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture (USDA).


The United States processed 7.58 million tonnes of corn to export 836 million gallons of non-beverage ethanol in 2015, up from 617 million gallons exported in 2013. The majority of exports continued to go to three main destinations — Canada, Brazil and Philippines. The three countries accounted for 53% of total exports in 2015, which compared with 68% of total exports in 2013, according to the FAS.

But it was smaller markets that kept sales strong in 2015, the FAS said. For the first time, China became a significant importer of U.S. ethanol, accounting for 8% of the total.

“U.S. ethanol exports to China increased 20-fold in one year to a record 71 million gallons in 2015,” the FAS said. “Previously, U.S. ethanol exports to China were small and excluded fuel. China’s ethanol imports surged in 2015 because imported ethanol was cheaper than domestic supplies and importers were allowed to test the international market for imports. China primarily uses corn to produce fuel ethanol, and following Brazil and the E.U., China is the fourth-largest fuel ethanol market with use mandates in six provinces and 27 cities. China’s price support scheme for corn, originally established to safeguard farmer incomes and ensure food security, has resulted in internal prices for corn far above world prices. High feedstock costs inflate domestic ethanol prices and make imports more attractive.”

Two other countries — South Korea and India — accounted for 8% and 7%, respectively, of U.S. ethanol exports during 2015. Neither country was an export destination for the United States in 2013, according to the FAS.

In the case of South Korea, the FAS said more than 90% of the ethanol shipments were intended for fuel use, which was a change from previous years when the country sought more non-fuel, industrial ethanol.

“Korea has not yet set an ethanol mandate, but there is interest to do so given its high dependency on crude oil imports and interest to reduce emissions,” the FAS said. “A roadmap has been set by the Ministry of Environment to begin distributing E3 and E10 in selected cities this year and E10 nationwide by 2035.”

In India, U.S. ethanol exports increased 26 million gallons between 2013 and 2015 to a record 47 million gallons.

“These imports are reportedly used in the industrial chemicals market, thus freeing up domestic supply for fuel use,” the FAS said. “India fuel ethanol use-mandates are repeatedly missed due to unsupportive regulatory and taxation policies as well as periodic weather-related shortfalls in feedstock (sugarcane) supply.”

The FAS said the value of U.S. ethanol exports totaled $1.8 billion in 2015, down 14% from $2 billion in 2014, reflecting lower prices. Meanwhile, the U.S. share of total global non-beverage ethanol exports held at 50% in 2015, the FAS said.

In June, the U.S. Grains Council (USGC) and its partners at the Renewable Fuels Association (RFA), Growth Energy and the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) detailed plans to increase the promotion of U.S. ethanol exports around the globe.

Examples of the work that the group has undertaken to build demand for U.S. fuel ethanol include a workshop in Japan aimed at paving the way for new market access, close coordination with a USDA mission to Mexico focused on local policy, a workshop in Korea and a future assessment in Vietnam.