COVID-19 Pandemic weighed on 2019/2020 global ethanol trade

November 22, 2020 |

In Washington, D.C., the U.S. Grains Council reports that at the close of the most recent marketing year, U.S. ethanol exports were down 12 percent year-over-year according to data from the U.S. Department of Agriculture, weighed on by COVID-19 and the global issuance of stay-at-home orders.

Over the course of the marketing year (September 2019-August 2020), U.S. ethanol exports, which account for nearly 60 percent of global trade, faced losses in fuel markets while staying relatively flat in industrial-use markets. New markets did emerge as ethanol demand increased in support of human health for sanitizing applications.

“In a typical year, about a quarter of U.S. ethanol exports are destined for industrial use markets. For some months in 2020, that shot up to half,” said Brian Healy, USGC director of global ethanol market development. “While the full effects of the pandemic have not been realized, stay-at-home orders were just reissued in many European Union (EU) member countries, and policy developments continue to move forward in critical markets that will drive ethanol demand in the future.”

For fuel markets, stay-at-home orders led to an overnight demand loss in the United States and around the world. The initially hopeful V-shaped recovery remains to be fully realized as a long tail of recovery that includes working from home, a patchwork of government stay-at home-orders and a lack of a vaccine hamper recovery.

Translated to global fuel ethanol demand, U.S. exports are down in all top 10 fuel ethanol export markets – Brazil, Canada, the EU and the United Kingdom (UK), Colombia, Philippines and Peru – a loss of 161 million gallons across those six markets. Notably, the octane markets of the Persian Gulf, Oman and United Arab Emirates (UAE) dropped out as top destinations due to the shift in pricing economics since the pandemic has been underway.

Category: Fuels

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