US has yet to export ethanol to Brazil

Recent reports that U.S. producers have been exporting ethanol to Brazil have been nothing more than rumors, according to Joel Velasco, the North American representative for Brazil’s Sugarcane Industry Association (UNICA). “There have been no imports into Brazil,” he said. “It’s still not competitive to deliver undenatured ethanol from the U.S. to Brazil.”

The rumors stemmed from an arbitrage window that opened in early October when the U.S. dollar experienced devaluation against the Brazilian Real, according to Velasco. However, the window before any U.S. producers took advantage of the situation.

Doug Newman, international trade analyst at the U.S. International Trade Commission, said tracking ethanol imports to Brazil is tricky because the government does not differentiate in its data between industrial ethanol and transportation ethanol. However, he has not received any reports of ethanol being exported from the U.S. to Brazil, he said, and added that Brazil’s 20 percent import tariff would make it difficult to export U.S. ethanol at a profitable rate. He also questioned whether any U.S. producer possesses the necessary permits to handle undenatured ethanol.

Velasco, however, did not rule out the possibility of U.S. exports in the future. “We believe in fair and open trade, and trade is a two-way street,” he said. “In the 1990s, Brazil was a net importer of ethanol from the U.S., something that many in the U.S. seem to forget. So, if it’s competitive to send corn ethanol to Brazil (as was the case in the ‘90s), it will happen.”

Meanwhile, the most recent sugarcane harvest report from Brazil showed improved weather conditions compared to the wet weather experienced earlier in the season. Accumulated ethanol production since the beginning of the harvest is 17.95 billion liters (4.74 billion gallons), which is still 3 percent less than last year. Of the sugarcane harvested thus far, 56 percent has been used for ethanol production. During the first half of October, sugar production increased by 21.96 percent while anhydrous ethanol production increased by 23.64 percent, which UNICA said proves producers’ preference for producing anhydrous ethanol over sugar.

source: ethanolproducer