By Jamie Martin
The U.S. ethanol industry is facing severe challenges due to the ongoing trade war with China. At New York Sugar Week, Mike Dwyer, chief economist of the US Grains Council, explained how tariffs have negatively impacted export opportunities.
“Without the tariff protection, we would probably supply 90-plus percent of all ethanol import needs they had,” Dwyer remarked.
China's E10 gasoline initiative, aimed at including 10% ethanol by 2020, was expected to boost demand for US ethanol. The trade conflict disrupted these prospects.
Dwyer stressed that resolving the trade war could immediately improve margins by 10 cents per gallon. While domestic initiatives like expanding E15 gasoline blends offer some support, the industry’s reliance on exports remains critical. “Exports are the future of our industry – even more so than E15,” he added.
The ethanol industry faces uncertain times as it navigates trade disputes and seeks to maximize both domestic and international opportunities.
Addressing trade issues will be crucial for the sector’s recovery and sustained growth.
Photo Credit: shutterstock-dickgage
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