Brazilian ethanol exports plummet 31 percent as US ethanol glut dampens trade

In Brazil, ethanol exports fell to 60 million gallons in November, a drop of 31 percent from October and a fall off of 17 million gallons, or 22 percent, compared to November 2006. Excess US ethanol supplies were blamed for the drop. In addition to falling export levels, prices also fell to $1.47 from $1.83 last year and $1.50 last month. Total export income from ethanol fell from $141 million to $86 million, a loss of  $55 million or 39 percent.

Overall, Brazilian ethanol exports for 2007 will be 800 million gallons, down 20 percent from 2006 owing to oversupply in the US market.

Last month, consultant Jonathan Kingsman estimated a world surplus of ethanol at 658 million gallons, compared to a small shortage in 2006. He projected that, with the rise in ethanol feedstock prices, Brazil would find excellent export potential in Europe in 2008. “Demand is disappointing for ethanol due to logistic problems, resistance, political issues,” he said.

Brazil is expected to ask the World Trade Organization to investigate U.S. ethanol subsidies. If the WTO takes on the case, it will be the first time the organization has ruled on energy subsidies.

Last month, Florida governor Charlie Crist said that he opposed the Brazilian ethanol tariff and would lobby the state’s Congressional delegation to reduce it. The 54 cent per gallon tariff is scheduled to expire in 2009, and Crist warned that it was unlikely that the tariff would be repealed in 2008 due to the US Presidential elections.

Recently, the UN Dispatch reported comments by the head of the Global Bioenergy Partnership that trade in biofuels and biofuel feedstocks is too low. The report says that European and US subsidies for domestic production and tariffs for imported feedstocks and biofuels are reducing biofuel production in tropical and subtropical climates, where biomass productivity is significantly higher.

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