Brazilian ethanol imports continued to drop, falling for the third consecutive month with 50.3 million liters entering the country in November, down almost 45% from October and 64% lower than a year earlier, the latest data from the Secretariat of Foreign Trade (SECEX) showed Tuesday.
This is the first time this year imports have fallen on the year.
Almost all of the volume entered the country through ports in the Northeast region, via Itaqui and Suape (25.2 million liters and 10 million liters, respectively) and originated in the US to be used as anhydrous ethanol to be blended into gasoline.
A total of 15 million liters also entered via Santos, the first time the Center-South region has imported directly from the US since March.
Cumulative imports of ethanol in Brazil over January-November were 1.74 billion liters, 2.5 times higher than a year earlier.
The slump in imports in November was expected, given the recent imposition of a 20% import tariff.
The import tax was implemented on September 4.
Due to the way the import tax is structured, volumes of up to 150 million liters a quarter enter the country duty free.
The combined volume of imports that entered in September, October and November amounted to 253 million liters. The tariff-free quota had already been exceeded in October.
In December the quota-free amount of 150 million liters/quarter restarts from zero.
Estimates from Kingsman, the agricultural analysis unit of S&P Global Platts, is that through the end of the year a total of just over 1.8 billion liters will be imported by Brazil in 2017.
For next year Kingsman expects the flow of imports to continue as Brazil is estimated to remain in an ethanol deficit.
Despite a higher proportion of sugarcane expected to be directly towards ethanol in the 2018-19 (April-March) CS Brazilian season than this season, a lower overall cane crush and ATR are expected to keep production at around 25 billion liters of ethanol in total (both hydrous and anhydrous), down from 25.3 billion liters expected in 2017-18.
