In 2016, the United States was again the world’s largest net exporter of ethanol, according to U.S. Department of Agriculture (USDA) trade data and as demonstrated in this U.S. Grains Council (USGC) chart of note.
Net exports are calculated as the difference between exports and imports. The 2016 calendar year concluded with U.S. net exports of 838 million gallons, the second highest level ever, exceeded only in 2011. U.S. ethanol shipments exceeded 1 billion gallons, and incoming shipments totaled nearly 215 million gallons in 2016.
For a majority of the 2000s, Brazil was the largest net exporter of ethanol in the world, and the United States was among the world’s largest net importers. The United States started as a net exporter of ethanol in 2010, exporting more than 410 million gallons and importing more than 131 million gallons that year.
By 2011, U.S. exports rose so sharply (more than 1.2 billion gallons) that the United States seized the top world net exporter of ethanol slot from Brazil. However, the drought in the 2012/2013 marketing year decreased the competitiveness of U.S. ethanol in global markets, cutting global exports. In 2014, U.S. net ethanol exports rebounded, exceeding Brazil’s net exports by 166 million gallons.
Today, the United States is both a major ethanol exporter and one of the world’s largest importers. Roughly 85 percent of U.S. ethanol imports originate from Brazil, with most imports entering the United States through the Gulf ports (largely Houston-Galveston) and West Coast ports (California).
Brazilian ethanol imported into Houston-Galveston is processed into ETBE (a fuel oxygenate) and then re-exported to Japan to meet that country’s strict greenhouse gas criteria, which favors Brazilian ethanol over U.S. ethanol. This is one issue USGC and its partners are working to address as part of their ethanol market development efforts in Japan.
The importation of Brazilian ethanol into California is driven by the state’s Low Carbon Fuel Standard (LCFS), which favors sugarcane ethanol over Midwest corn ethanol based on California’s calculation of carbon intensity. This year, however, the United States has imported very little Brazilian ethanol due to the much lower price for U.S. corn ethanol relative to Brazilian ethanol.
Conversely, U.S. ethanol exports to Brazil have increased substantially due to the price disparity relative to competitively-priced corn ethanol. The relatively high price of sugar compared to ethanol has redirected Brazilian sugarcane into sugar production rather than ethanol. As a result, Brazil has increased its imports of price-competitive U.S. ethanol to meet growing fuel ethanol demand, a trend USGC expects to continue through much of 2017.
Find more about USGC ethanol programs here.