FAS: Columbian ethanol production expected to rise in 2019

By Matt Thompson | September 13, 2019

The USDA’s Foreign Agriculture Service’s annual Colombia Biofuels Report for 2019 says domestic ethanol production in the country is expected to rise in 2019, while imports of U.S. ethanol are expected to rise at a slower rate. “Ethanol production in Colombia is expected to reach 490 million liters in 2019, four percent higher than 2018, as a result of normal weather conditions, a higher blend mandate (E10) and less aggressive competition of U.S. ethanol imports,” the report says.

According to the report, the increase in domestic production is spurred by favorable sugar cane growing conditions. Columbia’s seven ethanol plants have a production capacity of 660 million liters and use sugarcane as their feedstock. Six of the country’s sugar mills also produce ethanol, and have a capacity of 540 million liters, the report says.

In addition to favorable growing conditions, domestic production has been helped by duties placed on imports of U.S. ethanol. In January of this year, the country’s Ministry of Commerce, Industry and Tourism began a countervailing duty investigation, which resulted in a four-month duty of 9.36 percent on U.S. ethanol. That decision was a preliminary one, and a final decision is expected by the end of 2019.

That duty will prevent Columbian imports of U.S. ethanol from growing as fast as they have in previous years. In addition, “Colombian importers keep looking for sugarcane-based ethanol providers in Peru and Central America considering that in the long term, Colombia’s carbon footprint standards could become a trade barrier for U.S. corn-based ethanol,” the report says.

The report also says that Columbia biofuels blending mandates have, at times, been erratic. “However, since March 2018, the Colombian government introduced E10 and B10 across most of the country, except for three border departments with Venezuela where no blend mandate is established for ethanol and only two percent for biodiesel given cross-border smuggling issues,” the report says, adding that current domestic production allows the country to produce fuel to meet an E9 blend rate.