China Instigates Anti-Dumping Investigation

China’s Ministry of Commerce (MOFCOM) has initiated anti-dumping countervailing duty investigations into U.S. produced distillers dried grains with solubles (DDGS) exported to the country. Both the ethanol industry and the grains industry expressed concern over the announcement.

Dried Distillers GrainsPresident and Chief Executive Officer Thomas N. Sleight with the U.S. Grains Council responded by saying, “We are disappointed to see today the initiation of anti-dumping and countervailing duties investigations of U.S. DDGS exports to China. We believe the allegations by the Chinese petitioners are unwarranted and unhelpful. They could have negative effects on U.S. ethanol and DDGS producers, as well as on Chinese consumers, potentially over a period of many years. We are also confident that our trading practices for DDGS, ethanol and all coarse grains and related products are fair throughout the world. We stand ready to cooperate fully with these investigations and will be working closely with our members to coordinate the U.S. industry response.

“The U.S. Grains Council has worked in China since 1981 to find solutions to the challenges of food security through development and trade. There have been measureable positive effects of this work for the Chinese feed and livestock industries and Chinese consumers. We and our members will work vigorously in the coming months to demonstrate that the allegations being investigated by MOFCOM are false, even while we continue to stand ready to expand our cooperation with China on agricultural issues of mutual benefit.”

This is not the first time that China has been down this road. Back in 2011 China began an investigation into DDGs but then in 2012, they dropped it. Now, in 2015, they have re-begun the process.

Tom Buis, co-chair of Growth Energy, weighed in with a statement noting his dissatisfaction with the allegations. “We are disappointed to see the initiation of anti-dumping and countervailing duties cases against U.S. DDGS exports to China. The false allegations by the Chinese petitioners have the potential to seriously threaten our largest overseas market for DDGS and could have a significant impact on the supply, demand and price for DDGS in the U.S. and other foreign markets. We are working closely with our members and the U.S. Grains Council as it coordinates an industry response.”

RFA Offers Webinars on International Buyer Program

NEC 2016aThe Renewable Fuels Association is offering two free webinars next week for ethanol producers to learn more about the International Buyer Program that will be part of the 2016 National Ethanol Conference, February 15-17 in New Orleans.

The National Ethanol Conference (NEC) has been selected to be a participant of the U.S. Department of Commerce International Buyer Program, which recruits pre-screened foreign buyer delegations and brings them to selected trade shows and conferences to allow U.S. companies to connect with international buyers. International trade specialists will be at the International Trade Center onsite at the NEC to provide export counseling, matchmaking services, market analysis and more. The registration deadline for U.S. exporters to participate in the IBP is December 31, 2015.

The webinars will provide an overview of benefits to U.S. companies under the International Buyer Program, as well as market insights including demand, policies, and key players. They will also give information on how to register for the Exporter Interest Directory that will be distributed to the international buyers.

The webinar topics, dates and times are:

Ethanol Opportunities in Asian Markets, including Philippines, China, and India
Monday, December 7
10AM EST/9 AM CST
Free registration link

Ethanol Opportunities in Latin American Markets, including Brazil and Mexico
Tuesday, December 15
11AM EST/10 AM CST
Free registration link

Any U.S. ethanol company interested in exporting product overseas or expanding sales to new markets is encouraged to learn more in the webinars and register for the IBP.

Ethanol Exports Bounce Back in September

growth-exportsU.S. ethanol exports rebounded in September after a drop in August, with shipments expanding 20% to 60.3 million gallons (mg), according to Renewable Fuels Association (RFA) analysis of government data released this week.

RFA Research Analyst Ann Lewis reports that Canada remained the top market for U.S. ethanol, with 44% of expors. “Meanwhile, India imported 14.3 mg (24%), its highest level of imports since February,” said Lewis. Other top importers included South Korea (8.5 mg), Peru (4.3 mg), Mexico (2.7 mg) and the Philippines (2.7 mg). Tunisia backed away from purchases in September after accounting for a quarter of the market last month, while exports to Brazil were close to zero. Total year-to-date U.S. ethanol exports are almost 625 million gallons – which is up six percent from this time last year and already greater than total exports in 2013.

The California LCFS “ethanol shuffle” reappeared in September, as U.S. imports hit a 16-month high. The United States imported 24.9 mg of ethanol, almost 60% higher than August and the largest volume imported since May 2014. All of the 24.2 mg of undenatured ethanol imports originated from Brazil. The U.S. also imported 689,365 gallons of denatured ethanol in September, with 96% shipped from Spain and the remainder coming from South Africa and Canada. Year-to-date U.S. imports of ethanol now total 57.7 mg–quickly catching up to last year’s cumulative volume at this point. In September, the United States realized its 25th straight month as a net exporter, albeit at a significantly reduced margin.

Meanwhile, exports of U.S. distillers dried grains with solubles (DDGS) were lower in September with decreasing shipments to China, which still remains by far the number one destination for DDGS exports. Four countries account for most of the 1,108,582 metric tons of U.S. DDGS exports: China (484,535 mt), Mexico (140,338 mt), Viet Nam (101,335 mt) and South Korea (96,503 mt). China had been importing about 750,000 mt per month and making up about 64% of our DDGS export market. However, DDGS exports to China dropped 30% in August and another 26% in September, settling at a volume equal to just half of the June record high.

Grains Council Chairman at #ACE15

ace15-tiemannNebraska farmer Alan Tiemann was recently elected chairman of the U.S. Grains Council and he is excited about the work they are doing to expand exports of ethanol and the co-product Distiller’s dried grains with solubles (DDGS) used for livestock feed.

“For this coming year, my theme is ‘Excellence in Exports,'” said Tiemann during an interview after his address to the American Coalition for Ethanol conference this week in Omaha. “That’s what we’re going to focus on, excellence in exports – in ethanol, in distillers grains, in all the co-products, in sorghum and barley.”

During his address at ACE, Tiemann talked about the great success in exports of DDGS around the world and the potential for increasing ethanol exports to markets like Asia. “We look at Beijing and the smog issues they have there, the opportunities for a clean burning fuel like ethanol should be a no-brainer,” he said. Right now the largest export markets for U.S. ethanol are Canada and Brazil.

Listen to my interview with Tiemann here: Interview with Alan Tiemann, US Grains Council chairman

Listen to Tiemann’s full presentation at ACE here: USGC chair Alan Tiemann address to ACE

2015 ACE Annual Meeting Photos

Grains Council Presents Ethanol Export Strategy

During this week’s 55th Annual Board of Delegates Meeting in Montreal, Canada, the U.S. Grains Council (USGC) unveiled an ethanol export promotion strategy. The program was developed with input from the ethanol industry including U.S. Department of Agriculture’s Foreign Agricultural Service (FAS), Growth Energy and the Renewable Fuels Association (RFA).

U.S. Grains Council Chairman Ron Gray.

U.S. Grains Council Chairman Ron Gray.

“In 2014, the Council and its partners completed in-depth market assessments in Southeast Asia, Peru, Panama, Japan and Korea that produced valuable information used develop this strategy,” said USGC Chairman Ron Gray. “Our plans in these markets continue to develop, and we are carrying on market assessment work in places like Canada and the European Union. However, we are also moving forward aggressively with market development and policy-focused work in countries like the Philippines that have the potential to increase demand for U.S. ethanol in the near term.”

Ethanol was the subject of a general session panel at the meeting, including input from Growth Energy CEO Tom Buis, RFA President and CEO Bob Dinneen and Green Plains Renewable Energy Executive Vice President for Ethanol Marketing Steve Bleyl, moderated by USGC’s Chief Economist Mike Dwyer, a leading global biofuels analyst.

Ethanol export plans were explored in more depth during the Ethanol Advisory Team meeting, comprised of members from throughout the value chain, and a breakout session focused specifically on USGC’s ongoing ethanol-focused programs.

“U.S. ethanol exports are becoming increasingly vital to our stakeholders’ bottom line, which makes finding new markets for U.S. ethanol is a priority for the Council,” Gray added. “This plan shows our and our partners’ commitments to making that happen.”

Among other activities, two trade teams in the United States and three missions traveling overseas are scheduled to focus on ethanol in the remainder of 2015.

Brazilian Tariff on Imported Ethanol Increases

The Brazilian government this week increased the tariff on imported ethanol from 9.25 percent to 11.75 percent, effective immediately.

unicaThe Brazilian Sugarcane Industry Association (UNICA) issued a statement regarding the changes to Brazil’s tax policy signed into law by Brazilian President Dilma Rousseff Monday.

Ethanol produced in Brazil is subject to a range of federal taxes with revenue allocated to social security, including the social participation program (PIS) and social security financing contribution (COFINS) on domestic production. Today’s action by President Rousseff will level the playing field between Brazilian sugarcane ethanol and imported biofuels by subjecting foreign renewable fuels to comparable taxation and should not be confused with an importation tariff.

It is important to note the PIS and COFINS paid on ethanol imports will turn into a credit for the importer, which may then be used to pay other tax debts or be reimbursed by the Brazilian government, having the effect of anticipated taxes that would already be collected.

“Brazilian sugarcane producers have long been strong advocates of removing trade barriers and creating tax parity for renewable fuels,” said Elizabeth Farina, UNICA President. “Working together, the United States and Brazil have built a thriving global biofuels trade benefiting both countries, and we look forward to continued progress toward shared environmental and economic goals.”

Building Markets for Ethanol Exports

RFA's Kelly Davis on ethanol trade mission to Mexico

RFA’s Kelly Davis on ethanol trade mission to Mexico

Expanding export markets for U.S. ethanol was the focus last month as a group of industry representatives to Mexico and Japan on trade missions coordinated through a partnership between the Renewable Fuels Association (RFA), U.S. Grains Council and Growth Energy.

RFA Director of Regulatory Affairs Kelly Davis says they saw exceptional opportunities in Mexico. “I left very excited about a potential market beginning in 2016-17 for some corn ethanol exports,” said Davis.

The group met with PEMEX, the Mexican state-owned petroleum company, which Davis says has traditionally been against the idea of using corn ethanol for fuel but that may be changing. “Mexico has enacted an energy reform bill which opens their energy sector to competition,” said Davis. “We think this opens the market up to ethanol because it’s more price competitive compared to the oxygenate they now use which is MTBE.”

Davis says Japan currently has an E3 limit and most ethanol is blended into the supply as ETBE, “so technically they already use ethanol but they use ethanol as a feedstock to make ETBE and then use that as their blending agent.” There is some optimism that the market share of biofuels in Japan will continue to increase through the use of E10.

Learn more in this interview: Interview with RFA's Kelly Davis on ethanol trade mission trip

Nebraska Governor Talks Biofuels in Europe

Nebraska Gov. Pete Ricketts and ag delegation meet with officials in Brussels

Nebraska Gov. Pete Ricketts and ag delegation meet with officials in Brussels

Nebraska Governor Pete Ricketts is on an agricultural trade mission trip to the European Union with stops in Italy, Belgium, and Denmark. The trade mission, being coordinated jointly by the Nebraska Departments of Agriculture and Economic Development, includes a number of representatives from the state’s agriculture and biofuels industry.

“As the number two ethanol producer in the country, we have a big interest in seeing what we can do with ethanol and one of the concerns in the industry is being able to export,” said Ricketts during a conference call with reporters on Friday from Brussels. “We’re just starting the conversion with regard to how we can expand that and export our ethanol into the European Union.”

In Brussels, the trade team met with executives from Ghent Port Company, TOTCO, Sygenta Brussels, and a consultant for Belgian Biodiesel Board to promote Nebraska’s biofuels industry and build relations between firms in Europe and the U.S.

Neb. Gov Pete Ricketts discusses biofuels in Europe

Ethanol Trade Missions to Expand Markets

Representatives of the U.S. Grains Council (USGC), Renewable Fuels Association (RFA), and Growth Energy were in Tokyo this week for an industry market assessment of the potential to export U.S. ethanol to Japan.

growth-exports“The United States exported 900 million gallons of ethanol in 2014, supporting both U.S. farmers and the ethanol industry. We know that, going forward, ethanol exports have the potential to grow and become equally beneficial for our customers overseas,” said USGC president and CEO Tom Sleight. “USGC, Growth and RFA are committed to launching initiatives in 2015 and 2016 to build demand for U.S. ethanol and address barriers to ongoing imports.”

Over the next two years, the government of Japan will be undertaking a full review of its national energy policies, including biofuels, potentially opening up opportunities for additional ethanol exports there.

“The team came away with a much greater understanding of the current Japanese requirements and market conditions pertaining to ethanol and began the implementation of a strategy to help ensure that U.S. ethanol receives fair market access under the future energy policy that will be adopted when the current policy expires in 2017,” said Jim Miller, chief economist and vice president of Growth Energy.

“The team will continue examining the requirements of the Japanese sustainability standards, looking for ways to overcome infrastructure concerns, and compiling data responding to some of the misinformation government officials still hold regarding renewable fuels,” added RFA’s director of regulatory affairs, Kelly Davis.

Last week, the organizations were part of a mission with USDA’s Foreign Agriculture Service in Mexico to explore potential in that market. One mission member, Greg Krissek, CEO of Kansas Corn, reflected on the trip in this video from the USGC.


DDGS Exports to China Returning to Normal

Exports of U.S. distillers dried grains with solubles (DDGS) are starting to return to normal levels, according to the latest numbers for March.

Patriot Renewable Fuels DDGsThe Renewable Fuels Association reports that exports of the animal feed ethanol co-product rose in March for the fourth consecutive month, at 923,515 metric tons (mt), up 15% from February, with half of those shipments going to China. Exports of DDGS to China have been increasing this year after falling off last year due to a biotech trait issue. If normal shipments to China resume on an ongoing basis, 2015 theoretically could see total exports reach the 11 million mt mark. Mexico, Canada, Vietnam, and Thailand account for most of the remaining global market.

U.S. exports of ethanol in March were down slightly from February at 83.8 million gallons (mg), but that still represents the third-highest monthly volume in the last 12 months. Brazil and Canada accounted for half of total U.S. ethanol exports in March, followed by Oman and South Korea. The Netherlands, Tunisia and Nigeria were other key destinations in March.