Thursday, November 07, 2019

U.S. ethanol producers look to Mexico, Asia to boost sales

The American ethanol industry, reeling from lower demand and some of President Trump's policies, has been trying to increase sales in Mexico and South Asia. "Corn growers and ethanol producers have grown increasingly frustrated that Trump’s blending waivers for oil refiners are deflating the domestic biofuel market," Ryan McCrimmon reports for Politico's Morning Agriculture. "While they continue pleading with the White House for a solution, the industry is hoping foreign buyers can help make up for the sales they’re losing back home."

Specifically, trade groups like the U.S. Grains Council and the American Coalition for Ethanol are trying to promote the use of E10 fuel, which has 10 percent ethanol, with workshops targeting Mexican gas-station owners, fuel-equipment sellers and Mexican agriculture and energy officials. "U.S. ethanol exports to Mexico have largely been used for producing other goods, rather than as transportation fuel. But retailers in border cities are increasingly buying pre-blended E10 at U.S. terminals and reselling it at Mexican stations," McCrimmon reports.

E10 fuel is legal everywhere in Mexico except in the three largest cities, Guadalajara, Mexico City, and Monterrey. Ryan LeGrand, CEO of the Grains Council, told McCrimmon he thinks Mexican regulators will propose legalizing E10 in those cities by the end of 2019, and that there's a potential market for 1.2 billion gallons of annual ethanol exports to Mexico if those cities allow E10.

"Beyond Mexico, biofuel producers are aiming to grow sales in South Asia. And corn growers are hoping that China could make a significant purchase of U.S. ethanol as part of the limited trade deal that officials are expected to finalize this month," McCrimmon reports.

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