Sao Paulo — Brazilian ethanol imports recovered in July, surging to 142.45 million liters from 68.77 million liters in June, and were also 93% higher year on year, Secretariat of Foreign Trade data showed Friday.
Imports in the first seven months of 2018 totaled 1.36 billion liters, down 0.45% year on year, the data show.
Almost the entire volume imported in July entered Brazil via the North-Northeast region. The majority came in through Maranhao State, where 96.4 million liters were imported.
Brazil's North and Northeast regions are a net importer of ethanol. The region is supplied by imports, usually from the US, but also by domestic shipments from the Center-South region.
The volume of imports in the most recent month is a record high for any July, a time when the sugarcane crush in the Center-South region is running at full speed and it becomes the main supplier of the North-Northeast.
The jump in imports in July is understood to be due to the start of a new quarterly ledger for imports wishing to enter Brazil without paying an import tariff.
In September 2017, Brazil imposed a tariff of 20% on quarterly import volumes above 150 million liters.
The combination of higher imports and lower prices in the Center-South have translated to a plunge in prices in the North-Northeast region over the past week.
S&P Global Platts assessed anhydrous ethanol DAP Suape at Real 2,045/cu m ($551.64/cu m) on Friday, the lowest price assessed by Platts since May 18.
Total imports in 2018 should top 1.5 billion liters, S&P Global Platts Analytics estimates, down around 14% from 2017, but it would still be the second-highest volume of ethanol to be imported on record.
The anhydrous ethanol deficit is expected to be lower this season as a larger portion of the sugarcane crop is expected to be directed towards ethanol production. Platts Analytics estimates 60.5% of the cane crush will be directed to ethanol, compared with 53.4% in the past season. This should translate to a total of 27.72 billion liters, up 6% year on year.
