U.S. Grains Council targets rest of Asia for ethanol sales as tariffs shut out China
The U.S. Grains Council has stepped up efforts to drum up demand for its ethanol exports across Asia, its officials said, after former top customer China imposed steep import tariffs on the fuel amid the Sino-U.S. trade war, shutting out sales.
Council representatives took a booth for the first time at the Asia Pacific Petroleum Conference (APPEC), the largest oil industry gathering in Asia, to promote blending the renewable fuel with gasoline.
The Grains Council “is ramping up this year its commitment and presence in Asia market development for U.S. ethanol exports,” Tim Tierney, regional director strategic marketing for ethanol in north Asia at the council, told Reuters.
The United States exports 200 million to 300 million gallons of ethanol a year to Asia, equivalent to about 13,000 to 19,600 barrels per day. It had been targetting 1.5 billion gallons within five years, but the figure would likely be closer to 1 billion gallons without China, Tierney said.
“China clearly would have been a big market for us if we could address the trade dispute there, but we see Japan, Indonesia, Vietnam and the Philippines as our priority growth markets here,” he said on the sidelines of APPEC.
The 1 billion gallon target does not include India, which Tierney said was a “significant ethanol growth market for us as well.”
The United States exports about 10% of its 16.5 billion gallons of ethanol production, mostly to the west, including countries such as Brazil and Canada, while exports to Asian countries such as Japan and the Philippines have been growing.
The council also sees growth potential in China after Beijing increased ethanol blending in gasoline to 10% last year.
However, China shut the door to all U.S. agricultural purchases on Aug. 5 after U.S. President Donald Trump intensified the conflict with additional tariffs on Chinese imports.
“We have a 70% tariff on U.S. ethanol for China. I think there is a clearly a signal from China that they would rather not buy ethanol and other agricultural products,” Tierney said.
Source: Reuters (Reporting by Florence Tan; editing by Richard Pullin)