Buyers in China have canceled up to seven ethanol import shipments due to arrive by April, the first sign a likely hike in import duties is threatening to stall demand. The import tariff is likely to rise to 30% from 5% and would shut imports out of the market based on current prices. Seven cargoes could equate to between 266,000 and 443,000 cubic meters of ethanol.
Ethanol shipments to China in the first 11 months of 2016 hit 765,000 cubic meters, up 51% on the prior year, while 2015 imports of 686,000 cubic meters soared 2,741% from the year before. There has been some confusion over the 2017 tariff after the government said it would adjust the tax to “protect” the domestic industry but did not provide further details. If the tariff moves forward, U.S. ethanol shipments to China would stall due to a lack of profit margins.
Source: NAFB News Service