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Interest in US ethanol surges in Mexico

Interest from Mexican buyers in US ethanol imports is growing, with purchases increasing 1,756% from 2006 until last marketing year.

According to the US Grains Council (USGC), in 2006/2007 Mexico bought just 6.8 million litres of US ethanol, while during the 2014/2015 marketing year purchases were 126.5 million litres.

Mexico’s current imports of US ethanol are primarily used for industrial purposes, but reforms in the country’s energy policy are changing the picture.

Pemex, Mexico’s state-owned oil company, has a monopoly set to end in 2017, and petrol and diesel prices will no longer be set by the Mexican government in 2018.

This means that in a few years’ time, the company will need to be competitive in the international marketplace. 

Last year, Pemex announced its plan to introduce its first-ever blend of petrol mixed with ethanol and has since awarded a few contracts to local ethanol plants.

However, given the relatively small scale of Mexico's industry, it is unlikely it can meet the country's immediate fuel ethanol blending needs, which the USGC says will likely create new opportunities for US exports.

US ethanol exports will be tariff-free under the North American Free Trade Agreement (NAFTA).





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