US to overtake Brazil as world's largest exporter of ethanol

US ethanol exports could exceed exports from Brazil throughout the rest of this year, according to the Energy Information Administration (EIA). This is due to relaxed trading limitations and the soaring cost of sugar.

The first five months of 2011 saw US ethanol exports more than double, compared to the same period in 2010. By May 2011, export levels had reached 120 million gallons.

'For the remainder of 2011 it is likely that the United States will surpass Brazil as the world's largest ethanol exporter due to recent supply shortages and resulting high sugar prices in Brazil,' says the EIA. 'US ethanol has been relatively less expensive and has supplied markets that previously imported Brazilian ethanol.'

As a result, countries which previously imported Brazilian ethanol are now being supplied with ethanol from the US. These markets include Europe, Jamaica, UAE and Canada.

In the future, ethanol exports from the US could be affected when the E15 blending target comes in to play, as the EIA expects this to require additional domestic production. But for now, E15 is not available in the US and it is still unknown whether oil companies will invest in the infrastructure needed to sell the higher blends.