Bloomberg News

U.S. Exports No Ethanol to Brazil in May as Imports Rise

July 30, 2012

The U.S. halted ethanol exports to Brazil in May as imports of the biofuel from the South American country surged 55 percent, Energy Department data show.

The lack of shipments to Brazil helped trim total U.S. exports by 21 percent in May from April. U.S. exports to countries including Canada, Finland and the U.K. dropped to 1.4 million barrels from 1.78 million in April, the department said today in its Petroleum Supply Monthly report. Exports are down by a fifth from a year earlier.

Brazilian ethanol has become cheaper than the U.S. variety as the country uses sugar to make the biofuel and lowers the blend of the additive in its fuel supply. Sugar prices have fallen 2.2 percent this year. In August, the government cut the ethanol mix in gasoline to 20 percent from 25 percent.

“Brazil was just starting to get their cane harvest together,” said Jerrod Kitt, an analyst at Linn Group in Chicago. “As this picks up steam, you’re going to see more and more” ethanol imports.

It was the first time the U.S. didn’t ship ethanol to Brazil since August 2011. Exports to Brazil were 137,000 barrels in April.

U.S. Imports

The U.S. imported 384,000 barrels of ethanol in May, 91 percent of which came from Brazil. That’s the largest amount of the biofuel brought in from the South American country since December. There were no deliveries of the additive from Brazil a year ago.

“You’re going from a net exporter to a net importer,” Kitt said.

Anhydrous ethanol in Sao Paulo fetched $2.39 a gallon as of July 20 and hydrous ethanol, used in flex fuel cars, cost $1.97, according to data compiled by Bloomberg.

Denatured ethanol for August delivery rose 5.8 cents, or 2.3 percent, to settle at $2.613 a gallon on the Chicago Board of Trade. Futures have jumped 19 percent this year, spurred by more expensive production costs because of record corn prices.

Ethanol production in the U.S. fell 17 percent to 796,000 barrels a day in the week ended July 20 from a record 963,000 on Dec. 30, according to Energy Department data.

To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net

To contact the editor responsible for this story: Bill Banker at bbanker@bloomberg.net


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