The US exported 334.4 million liters (88.3 million gallons) of ethanol in January, 26% lower than a year ago and down 49% month on month, Department of Agriculture data showed Wednesday.
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It was the lowest monthly export total since September and much lower than market expectations.
The market had expected exports to average over 140,000 b/d, according to one source, but the data showed exports were closer to 68,000 b/d.
The most notable absence from the exports list was China, which had been reported to be buying large quantities for delivery through the first quarter.
China levied a 30% import tariff on ethanol at the beginning of 2017, but its goals of a nationwide E10 mandate by 2020 had created a new surge in demand and reportedly opened the arbitrage late last year.
But the country took no fuel ethanol in January, according to Wednesday's data, and barely more than 14,000 liters of non-fuel ethanol.
"It's a head-scratcher," said a second source. It was unclear if exports to the country were somehow not counted in the data or if exports to China will appear in next month's data as they departed later than expected.
Brazil remained in the top spot as a structural deficit in the intercrop season kept the arbitrage open to the country despite a 20% tariff on imports above 150 million liters in a given quarter. The US exported 154.2 million liters to Brazil in January.
Canada started the year as the second largest importer as it brought in 71.9 million liters of ethanol.
Canada is a consistent source of demand for US ethanol, frequently topping the list of buyers of US ethanol.
In 2018, S&P Global Platts Analytics forecasts US fuel ethanol exports will reach 5.3 billion liters, up nearly 10% from 2017.