Export Markets for ‘Liquid Corn’
by Holly Jessen (Ethanol Producer Magazine) Global trade for U.S. ethanol has been trending up in the past decade, becoming an important part of the industry’s growth strategy. — Looking at the numbers, it doesn’t take long to conclude that the U.S. is developing into an ethanol export powerhouse. “As recently as 2006, the U.S. barely registered as an exporter at all, and between 2006 and 2014, our exports have risen by $2 billion,” says Michael Dwyer, chief economist for the U.S. Grains Council. “There has been a dramatic change in the competitiveness of American ethanol.”
By volume, U.S. market share of world exports was only a few percentage points in 2006. In 2015, the U.S. share of world exports is expected to remain at nearly 50 percent, about the same level as in 2014, and twice the amount exported by Brazil.
…
One factor in growing demand is the difference in price of U.S. and Brazilian ethanol, from the export position. “We’ve got them beat by about 30 cents a gallon,” he says.
…
There has been a significant shift, confirms Geoff Cooper, senior vice president of the Renewable Fuels Association. Five years ago the ethanol industry assumed the U.S. EPA would enforce the renewable fuel standard (RFS), set by Congress in 2007. But, unfortunately, that didn’t happen. “The ethanol export market emerged very rapidly, at a very crucial time for the industry and really provided a crucial outlet for some of the spare capacity and production that we have in the United States,” he says. “It has helped support robust demand, healthy pricing and healthy economics for the ethanol sector.”
…
Ethanol doesn’t only have value when it’s an inexpensive source of energy. “It’s all about octane,” Cooper says. “What I have learned in the past year is that export markets are increasingly valuing U.S. ethanol for its octane content, just as domestic refiners here in the U.S. have for several years. I think what we have seen this year is a clear indication that ethanol’s octane value is being recognized globally as well.” READ MORE / MORE / MORE and MORE (Renewable Fuels Association)
