China's ethanol imports in January plunged 98% month on month to a three-month low of 2,415 cu m, according to data released by the General Administration of Customs on February 25.
The sharp drop was due to the increase in import tariff to 30% in 2017, from 5% since 2010, on denatured ethanol, which accounted for 84% of the country's total ethanol imports in 2016.
Of the cargoes that were supposed to arrive in China in the first quarter of this year, seven -- totaling 260,000-440,000 cu m -- were reported to have been cancelled because of the higher tariff, said market sources.
In this case, denatured ethanol imports dropped to a multi-year low of 3.77 cu m, accounting for a mere 0.16% of the total ethanol imports in January, with Japan being the biggest supplier.
Meanwhile, undenatured ethanol imports jumped to 2,411 cu m in January, compared with 7 cu m in December 2016. Vietnam was the biggest supplier of undenatured ethanol at 2,381 cu m, accounting for 99% of the total amount.
On the export front, China exported 14,086 cu m ethanol in January -- 12,757 cu m of it undenatured ethanol. Saudi Arabia, North Korea and South Korea were the top three buyers of China's undenatured ethanol, while South Korea was the only buyer of China's denatured ethanol in the month.
China emerged as a net exporter of ethanol again in January since October 2016.
The USDA report has estimated China's total ethanol imports in 2017 to come down to 300,000 cu m from 853,000 cu m last year, but many market sources said they expect the volumes to be much smaller.
