Sao Paulo — Brazilian ethanol imports continued to drop, with 91 million liters entering the country in October, down almost 17% from September but still 27% higher than a year ago, the latest data from the Secretariat of Foreign Trade (SECEX) showed Monday.
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Almost all of the volume entered the country through ports in the Northeast region via Itaqui (90.6 million liters) and originated in the US to be used as fuel blended into gasoline.
Cumulative imports of ethanol in Brazil from January to October reached almost 1.7 billion liters, over three times higher than a year ago.
The decrease in the imports in October was anticipated, given the recent imposition of the 20% import tariff.
However, due to the way the import tax is structured, volumes of up to 150 million liters/quarter enter the country tariff free, which may provide incentive to the some market participants to bring in volumes at the beginning of the quarter to avoid the duty.
The import tax was implemented as of September 4.
The combined volume of imports that entered in September and October amounted to 201 million liters, so they are already exceeding the tariff-free quota.
Estimates from Kingsman, the agricultural analysis unit of S&P Global Platts, is that approximately another 150 million should be imported through the end of the year to total over 1.8 billion liters of imports in Brazil for 2017.
The flow of imports is expected to continue for next year as the country's ethanol deficit is forecast to remain at similar levels.