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Chinese ethanol imports to tumble by two-thirds, as production rises

Chinese ethanol imports to tumble by two-thirds, as production rises

BEIJING: Chinese fuel ethanol imports will plummet by nearly two-third in 2017, thanks to trade restrictions and rising domestic production, US officials said. The US Department of Agriculture’s Beijing bureau saw 2017 imports of bioethanol, ethanol produced from organic matter for use as road fuel, at just 300m litres, down from 853m litres a year earlier. The outlook follows a series of increases to Chinese duties on US imported ethanol, and an ongoing drive to increase domestic ethanol use. The bureau forecast 2017 fuel ethanol production at a record 3,550m litres, up 12.6% year on year, citing “strong demand, plentiful feedstocks, and continued government support”. “Policy changes have reversed the fortune of China’s ethanol producers, driving production higher,” the bureau said.

China’s latest five year plant targets ethanol production at 6,335 million liters by 2020. Most of China’s ethanol production is based on corn, of which the country has very large stocks. Consumption in 2017 is seen as largely unchanged year-on-year, at 3,849m litres. In 2016 almost all Chinese ethanol imports came from the US, but this picture will change in 2017, thanks to a package of measures including higher tariffs, as well as special anti-dumping and anti-subsidy duties on major American producers. This month Todd Becker, chief executive of US ethanol group Green Plains, told investors that the company outlook was based on “zero” US exports to China this year. And ADM boss Juan Luciano this month told investors that US exports to China in 2017 were “questionable”.