USGC: Ethanol exports down in 2018-’19 marketing year

By Erin Voegele | October 17, 2019

The U.S. Grains Council has released final export numbers for the 2018-’19 marketing year. Ethanol exports saw a small drop while U.S. distillers dried grains with solubles (DDGS) exports remained relatively flat. Overall exports of U.S. grain in all forms (GIAF) fell 11 percent from last year’s all-time high, but 2018-’19 still ranked as the third best export year of all time.

Ethanol exports fell to 1.55 million gallons for the 2018-’19 marketing year, down from 1.63 million gallons during the 2017-’18 marketing year.

“While ethanol only represents 5 percent of the overall GIAF decline in 2018/2019, this year’s performance was a noticeable pause after five years of uninterrupted double-digit increases and new record highs,” said Ryan LeGrand, USGC president and CEO in a statement. “Lower exports to China and Brazil accounted for 182 million gallons of loss—a casualty of reduced market access—but otherwise exports were largely up to the other top ethanol markets.

“Had those two markets remained even with last year’s shipments, U.S. ethanol exports would have likely set another new record high,” LeGrand continued.

Data released by the USGC shows increased tariff rates and punitive duties that China placed on U.S. ethanol over the past year resulted in a 99.9 percent decline in U.S. exports, from 108 million gallons in 2017-’18 to 62,547 gallons in 2018-’19. Brazil’s tariff rate quota on ethanol and the country’s plentiful domestic supplies also negatively affected U.S. exports, which fell to 390.18 million gallons, down from 462.56 million gallons in 2017-’18.

USGC data, however, shows other markets made healthy increases in U.S. ethanol imports. India set a new record as the third largest buyer at 202.85 million gallons, up from 162.02 million gallons in 2017-’18. U.S. ethanol exports to South Korea also increased, from 76.42 million gallons in 2017-’18 to a record 91.65 million gallons in 2018-’19. The USGC pointed out that both India and South Korea use currently import ethanol for industrial uses, rather than for use as fuel.

The data also shows that U.S. ethanol imports to the European Union, the Philippines, Columbia and Peru increased. Canada, the second largest buyer of U.S. ethanol, remained essentially unchanged at 330.77 million gallons.

The USGC reported that U.S. DDGS exports remained relatively flat in 2018-’19 at 11.2 million tons, down 3.5 percent from 2017-’18. The largest decline was in Turkey, with fell to 468,209 tons, a 60 percent drop when compared to the 1.17 million tons of U.S. DDGS imported in 2018-’17. The USGC attributed the decline to currency devaluation that sharply increased dollar imports in local currency and made letter of credit difficult to obtain. Without the export contraction to Turkey, the USGC said total U.S. DDGS exports would likely have increased when compared to 2017-’18.

According to the USGC, Mexico continues to be the largest buyer of U.S. DDGS at 2.02 million tons, down 5.1 percent from 2.13 million tons in 2017-’18. Other regions, however, continue to exhibit growth, particularly in Southeast Asia. The USGC said its market development efforts in recent years have proven successful, with Southeast Asia now accounting for 30 percent of all U.S. DDGS exports, reaching 32.4 million tons in 2018-’19, up 10 percent from 2017-’18 and up 233 percent from 2012-’13.

Overall, exports of GIAF reached 106 million metric tons, down from 119.83 million tons in 2017-’18 but still representing the third highest year on record. The USGC said decreased exports were particularly pronounced for U.S. corn and sorghum.

Additional data is available on the USGC website