US ethanol remains 35% cheaper than Brazilian, prompting exports

March 15, 2018 |

In Brazil, currently, ethanol is $1.50 per gallon at the Gulf Coast Ports in the United States, while ethanol in Brazil is $2.32 per gallon. Due to price competitiveness and strong demand, Brazil, the second largest global ethanol producer, is also the largest overseas buyer of U.S. ethanol.

One contributing factor is the internal distribution of ethanol in Brazil. Ethanol mills are mostly located in the sugar producing areas of southern Brazil. Because of infrastructure constraints, it is cheaper to ship ethanol by boat from the U.S. to the northern regions of Brazil than by overland transport through Brazil.

Some new ethanol mills are located in Brazil’s northern corn-producing regions. An expansion of corn ethanol production in Brazil would likely make U.S. ethanol less competitive.

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Category: Producer News

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