U.S. ethanol exports sank in August, DDGS shipments down slightly

By Ann Lewis, RFA research analyst | October 07, 2015

U.S. ethanol exports fell in August to the lowest monthly volume in more than two years, according to Renewable Fuels Associaiton analysis of government data released Oct. 7. At 50.1 million gallons, total ethanol shipments in August were 35 percent lower than in July, falling by 27.1 million gallons. Ninety percent of exports were destined for only 10 countries, with the majority of shipments split between Canada (21.4 million gallons, or 43 percent of total exports) and Tunisia (12.6 million gallons, or 25 percent of total). China (3.3 million gallons), the Philippines (3.0 million gallons), South Korea (2.8 million gallons) and Mexico (2.0 million gallons) account for much of the remaining balance. Once again, Brazil remained a minor player in the U.S. ethanol export market, taking in just 1.7 million gallons (compared to 25.1 million gallons only 5 months ago). Total U.S. ethanol exports for the first eight months of 2015 stood at 564.5 million gallons, indicating an annualized rate of 847 million gallons.

August exports of undenatured ethanol for fuel use fell 44 percent from July to 26.2 million gallons. Nearly half of those exports moved to Tunisia (12.6 million gallons), with China (3.3 million gallons), the Philippines (3.0 million gallons) and South Korea (2.7 million gallons) also pulling in notable volumes. Exports of denatured ethanol fuel decreased by 24 percent from July, down to 20.1 million gallons. This is the lowest denatured volume since August 2010. Canada took the lion’s share of denatured product at 18.1 million gallons (90 percent of exports), with Jamaica, Singapore and Turkey receiving much smaller volumes. The United States exported 356,211 gallons of undenatured ethanol for non-fuel, non-beverage use, a decrease of 39 percent over July. Denatured ethanol for non-fuel, non-beverage purposes was the only product to see any upward movement over the prior month, with nearly all of the 3.4 million gallons crossing the border to Canada.

After months of virtually nonexistent fuel ethanol imports, the United States saw 15.7 million gallons enter the country in August—greater than the combined imports from the past 5 months. All but 3 percent of total imports originated in Brazil (11.8 million gallons undenatured, 3.8 million gallons denatured), with Spain and Sweden responsible for the remainder. At 65.8 million gallons, year-to-date imports are just half of last year’s total at this point. In August, the United States boasted a net exporter status for two years straight.

August exports of U.S. distillers dried grains with solubles (DDGS)—the animal feed co-product manufactured by dry mill ethanol plants—faded 6 percent from the record high logged in July to a still-sizable 1,279,396 metric tons. Prominent trading partner China pulled back in August, importing 655,153 metric tons of DDGS. China received roughly half of U.S. DDGS exports in August, compared to the 65 to 74 percent market share seen in recent months. Mexico (126,096 metric tons, or 10 percent of exports), South Korea (108,381 metric tons), Vietnam (70,274 metric tons) and Thailand (30,581 metric tons) remained as other top destinations for U.S. product again in August. Shippers successfully found alternative markets given the lull in China, with sizable growth in exports in Southeast Asia, Great Britain and the Middle East. Total U.S. DDGS exports for the year are 8.5 million metric tons, implying an annualized total of 12.7 million metric tons.