US ethanol exports double, Iowan ethanol now cheaper than Brazilian: RFA

In Washington, the RFA has released a report, “The paradox of rising US ethanol exports: increased market opportunities at the expense of enhanced national energy security,” which explores the increase in the global ethanol export trade, particularly in the Middle East.

Overall, the RFA is reporting that the US exported 83 million gallons of ethanol in Q1 2010, or around 3 percent of US production, with exports rising to 45 million gallons in March.

The RFA notes “As long as domestic ethanol usage is restricted by the regulatory limitation on 10 percent blends, the U.S. ethanol industry will be forced to look to the global marketplace for new demand source.”

The RFA is also noting that “current prices show Iowa ethanol plant-gate ethanol prices are 50 cents per gallon lower than Brazilian ethanol prices,” reflecting the weak prices for corn and US domestic ethanol and the persistently higher prices for sugar in the wake of poor harvests in India last year.

The RFA adds that the US has 13.5 billion gallons in ethanol capacity, with a US market currently capped at 12.5-13.5 billion gallons due to what it terms an “arbitrary 10 percent cap” on non flex-fuel vehicles (as well as the failure of E85 ethanol to gain traction) and noted that more capacity was “waiting in the wings”.

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source: biofuelsdigest