Exports of U.S. ethanol are off to a strong start for the first quarter of the 2016/17 marketing year and are at their highest levels during that time frame over the past five years. Brazil, Canada and China wre the top customers for U.S. ethanol, respectively. The real story to this strong export pace is due in large part to Brazil who has increased imports of U.S. ethanol substantially to 111.6 million gallons in the first three months of the current marketing year, representing nearly a third of total U.S. ethanol exports, the second highest volume of U.S. ethanol exports to that country over the last decade. The Brazilian government is enforcing mandates that are driving the increases in imports of U.S. ethanol, as Brazilian sugarcane has been diverted to sugar production. To enforce the mandate, Brazil ramped up imports of price competitive U.S. ethanol. The question now becomes how big of a setback we will take with the hike in Chinese ethanol import tariffs?

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