Brazil ethanol imports soar to $841m in 2011

18 January 2012 22:02  [Source: ICIS news]

HOUSTON (ICIS)--Brazil ethanol imports soared to $841m (€665m) in 2011 from $39m in the previous year, a foreign trade ministry spokesperson said on Wednesday, an increase that stems chiefly from a wave of ethanol imports from the US.

Brazil used to lead the world in exports of ethanol, but last year the country was forced to import the biofuel from the US to avoid a potential supply shortage in recent months.

Brazil imported a total of 1.1bn litres of anhydrous ethanol from the US in 2011, a broker said, quoting government figures published in the Brazilian press last week.

Ethanol imports in December alone hit 279m litres, a record figure for a single month, the source said.

The figures could not be immediately confirmed with the foreign trade ministry.

But recent data released by US trade group the Renewable Fuels Association (RFA) showed US ethanol exports hitting a record 152m gal (575m litres) in November, with Brazil receiving more than half of those shipments.

Canada, Mexico and the Netherlands were among other top destinations, according to the RFA.

November is the last month for which US data is available.

US ethanol exports in January-November stood at 1.02bn gallons, the group said, adding that exports were on pace for a 2011 calendar year total of 1.11bn gal.

The US is the world's top ethanol producer with nearly 15bn gal/year of nameplate capacity.

The RFA touted the figures, saying "exports have become an important part of the business model for American ethanol producers”.

In Brazil, however, the inflow of the US product was taking part of the blame this week for a drop in anhydrous ethanol prices, indicating the impact of a reduction in Brazilian ethanol production in 2011 may have been overestimated.

Brazil blends anhydrous ethanol in gasoline at a mandated 20%.

The blend level, which used to be 25%, was reduced in 2011 to help curtail demand, but is now adding even further length to the market, a market participant said.

Anhydrous ethanol prices were assessed this week at Brazilian reais (R) 1,310/m³ (cubic meter), down from R1,400/m³ four weeks earlier.

"It will be difficult for anhydrous ethanol prices to rebound, considering the drop in the blend level ... and the considerable import volumes," the source said.

($1 = €0.79)

For more on ethanol visit ICIS chemical intelligence

By: William Lemos
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