With persistent rain affecting ethanol and sugar production in Brazil this season, prospects are that U.S. ethanol may be exported to that country to meet the demand.

According to the Brazilian Sugarcane Industry Association UNICA, ethanol production this year is down more than three percent so far while demand continues to grow. “While production has been negatively affected by weather conditions, reducing the availability of products offered in the market, demand has been growing steadily,” UNICA reports. “Ethanol (anhydrous and hydrated) sales to the domestic market in the month of September reached 2.05 billion liters, 14.9% more than in the same month last year.”

As for the export market, total shipments from April to September reached 2.1 billion liters, down 12.52% from the 2.41 billion liters recorded in the same period last year. The most significant reduction in exports involves anhydrous ethanol – the type that is blended with gasoline – with total shipments down 58.03% for the year, although there was a 42.46% increase in hydrated ethanol exports over the same period.

Reuters this week reported on the buzz about ethanol exports to Brazil, with the weak dollar making prices more competitive. All gasoline sold in Brazil contains 25 percent ethanol. Last year Brazil exported 1.365 billion gallons of ethanol, with 740 million of that coming to the U.S.