US ethanol exports to Brazil facing tariffs
All US ethanol imports into Brazil now face a 20% tariff following the expiry of the deadline set for December 14.
This relates to a Brazilian quota allowing for tariff-free imports of 187,500 cu m of the US product.
Producers were not expecting a second renewal of the quota market, issued on September 14, mainly due to the new international political scenario and uncertainties about an extension of the Brazilian sugar quota into the US.
S&P Global Platts reported that although Brazilian fuel demand was strongly hampered by COVID-19, anhydrous ethanol domestic supply and imports were also reduced over the year, creating a need for imports to meet estimated demand in the first quarter of next year.
Anhydrous ethanol is used in Brazil at a mandatory blending level of 27% in petrol, while hydrous is the Brazil's E100 standalone biofuel.
In November, sugarcane-based anhydrous production totalled 783 million litres, the highest production level for the month since 2016, while corn anhydrous ethanol production added 71 million litres, 100% higher on year.
Despite the import quota extension under which the 187,500 cu m could enter the quota free of the 20% import tax, the most recent official import data shows that from September 1 to November 30 just 58,000 cu m entered the state.
The lack of imports were mostly attributed to the demand uncertainties and steep depreciation of the Brazilian real against the US dollar.
This relates to a Brazilian quota allowing for tariff-free imports of 187,500 cu m of the US product.
Producers were not expecting a second renewal of the quota market, issued on September 14, mainly due to the new international political scenario and uncertainties about an extension of the Brazilian sugar quota into the US.
S&P Global Platts reported that although Brazilian fuel demand was strongly hampered by COVID-19, anhydrous ethanol domestic supply and imports were also reduced over the year, creating a need for imports to meet estimated demand in the first quarter of next year.
Anhydrous ethanol is used in Brazil at a mandatory blending level of 27% in petrol, while hydrous is the Brazil's E100 standalone biofuel.
In November, sugarcane-based anhydrous production totalled 783 million litres, the highest production level for the month since 2016, while corn anhydrous ethanol production added 71 million litres, 100% higher on year.
Despite the import quota extension under which the 187,500 cu m could enter the quota free of the 20% import tax, the most recent official import data shows that from September 1 to November 30 just 58,000 cu m entered the state.
The lack of imports were mostly attributed to the demand uncertainties and steep depreciation of the Brazilian real against the US dollar.
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