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Ethanol Exports Rise, Even to Mideast

WASHINGTON - The United States has a growing new export - ethanol fuel - and a lot is going to the Middle East.

New government data show that nearly 46 million gallons of U.S. corn ethanol was exported in March, up from 4 million in March 2009. For the first three months of this year, ethanol exports totaled 72 million gallons.

Twelve billion gallons of ethanol must be used domestically this year under the government's biofuel mandates.

That exported ethanol has been heading to a variety of nations, including the United Arab Emirates, Brazil, Canada, the Netherlands - probably bound for other European points - Nigeria and India. Holland and the United Arab Emirates accounted for more than half the shipments. The United Arab Emirates uses ethanol as an oxygenate in gasoline.

The increase in exports comes when the industry needs it most.

According to an industry trade group, the exports stem from the saturation of the U.S. market. The U.S. industry has been pushing the Environmental Protection Agency to raise the limit on the amount of ethanol that can be blended with gasoline.

"Unfortunately, current regulations restrict the amount of ethanol that can be used domestically. Therefore, the industry is being forced to look to the export market for additional growth opportunities," said Geoff Cooper of the Renewable Fuels Association.

Brazil's ethanol industry sees the surge in U.S. exports differently. The Brazilian industry has been struggling to compete with the U.S. industry as prices for American ethanol have fallen about 50 cents a gallon below that of Brazil's sugarcane-based product. Brazil keeps its ethanol at home to meet domestic demand and augments supplies with U.S. product.

Joel Velasco, the Brazilian sugarcane industry's representative in Washington, said in a recent blog post that the exports show U.S. producers can compete without subsidies and import tariffs.

"The corn ethanol industry is well on the way to becoming the world's top exporter," Velasco wrote. "And yet, defying all logic, they maintain that they need more subsidies and trade barriers, because they will be decimated if they are forced to compete - with a higher-priced ethanol, no less."

Brazil exported nearly 1.4 billion gallons of ethanol in 2008 and 874 million in 2009 but has shipped just 95 million through April of this year, which should be less than U.S. exports in the same period, Velasco said.

Renewable Fuels Association President Bob Dinneen attended a world biofuels conference in Spain last week and reported that there was lots of talk there about the surge in U.S. ethanol exports.

Some exported ethanol is probably used for solvents and other industrial products.

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