The CIF Philippines fuel-grade marker -- which reached a recent high of $569.33/cu m on June 15 -- has fallen swiftly over the past month as underlying futures in the US witnessed sharp declines amid concerns of a supply glut.
It has staged a modest recovery early this week after reaching $490/cu m Friday, the lowest since $489/cu m on March 23.
A senior trader based in Asia said sentiment regarding corn was the most significant factor behind the sharp price moves. "It is all about corn futures, and what people make of them," the trader said.
Furthermore, US producers were said to be keen to do more business in Asia, and have lowered their export premiums significantly, in some cases halving them from usual levels.
Prices were expected to fall further for the rest of this year, sources said, with many Asian customers eyeing purchases for the fourth quarter amid a steepening market backwardation in the US. These include buyers in China and India, two of the largest Asian markets that US producers have set their sights on.
Unlike the Philippines, these two countries have not established a regular trade flow for US ethanol, with import volumes fluctuating significantly depending on whether the arbitrage is open.
