The pandemic has affected gasoline demand by about 10 percent, which is having a big impact on ethanol consumption.
Craig Willis, Senior vice president for the ethanol trade association Growth Energy, is the nation’s chief international promoter of US ethanol. “China is the one that can light up my text message box faster than any country for sure,” said Willis. “The trade is watching it very closely. And frankly we have been shut out of China on ethanol since March of 2018, so that has been almost 33 months we have been shut out because of the trade war. However, ethanol is in the Phase 1 trade agreement. We had a 70% tariff on our product there which is a huge tariff. That has been lowered to 45% but that is still too high for a lot of product to be flowing in, but the good news is there are rumors there have been two vessels that have traded, going to that country, so hopefully that is the start of something larger. That remains to be seen. They are still using ethanol there.” He continued. “They are using E-10. They have talked about E-5 or 5% ethanol in some provinces. But frankly that is the one that would probably move the needle the fastest for all of our members and probably for all your farmers, anybody frankly in agriculture that is a viewer of yours.
Willis, the former president of ADM ethanol, says there is also an alternative use for the product.
“Mexico. We have almost doubled our exports to that country because of hand sanitizer demand. South Korea demand is up also, India. So all those 3 are industrial homes for ethanol, so they’ve been the winner this year.”