NPRA ’11: US may overtake Brazil as top ethanol exporter

28 March 2011 01:43  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--The US could overtake Brazil as the world’s top ethanol exporter in 2011, a market source said on Sunday.

The US biofuel will continue to flow to other markets because local supply will outstrip demand, the source said on the sidelines of the International Petrochemical Conference (IPC) in San Antonio.

Brazil has led the world in ethanol exports for several years, but shipments dropped by 43% in 2010 because tight supply and an unfavourable currency exchange rate made the Brazilian product too expensive in other markets.

Ethanol exports from Brazil totalled 1.6bn litres (423m gal) in the 2010-2011 crop year, down from 2.8bn litres in the 2009-2010 period, according to data from the Brazilian sugarcane industry group Unica.

Meanwhile, the US exported a record 350m gal (1.3bn litres) of ethanol in 2010, according to figures from industry group Renewable Fuels Association (RFA), which touted the shipments as a sign the US industry was going global.

US exports flowed to Canada, Europe and in recent months to Brazil, which had to resort to the US biofuel to avoid a potential supply shortage before the start of its main sugarcane harvest in April.

Brazil will receive around 200m litres (53m gal) of anhydrous ethanol, mostly from the US, over the next few weeks, market sources said.

Half of the cargoes will go to Brazil’s centre-south region, which accounts for around 90% of the country’s ethanol production.

The other half will go the northeast region, which produces the remaining 10%.

Brazilian ethanol prices soared to record highs in March, lifted by tight supply and unexpected strong demand, particularly for hydrous ethanol.

Hydrous ethanol is used as a standalone fuel in flexible-fuel vehicles (FFVs).

The last time Brazil imported ethanol in large volumes was in the early 1990s. The cargoes were also from the US, which at the time was only a small producer of the biofuel.

The US is now the world’s largest producer, while Brazil, until last year, was the top exporter.

Hosted by the National Petrochemical & Refiners Association (NPRA), the IPC opened on Sunday and closes on Tuesday.

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy

By: William Lemos
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