16.
01.17
15:19

Import duties threaten China's ethanol imports

Chinese buyers have canceled up to 7 ethanol jobs that should come to be delivered until end of March. This is the first sign of a possible increase in import tariffs, which China wants to lower demand from the world market.
Since there will be for 2017 probably no continuation for a reduced tariff on ethanol imports, giving 5% rises to 30%, which will prevent all further imports based on the current price level.
It has been the "wash-out" of several contracts which should be delivered in Q1. For other contracts, no funding is concluded, so that these are traded back. Currently has contracts for 266,000 to 443,000 cubic metres of ethanol have been cancelled. In the first 11 month of the year of 2016, China imported 765.316 cubic metres, what were 51% more than in the comparison period rum of the previous year. And 2015 rose imports 2.741 percent the year before that.
In the weeks before, confusing messages to the market were, as regards import duties. There was a list of goods, where the preferential duty rate of 5% should be deleted. Ethanol was not included on this list. It is but well to the application of the import duty by 30%.
The importers say that this levy kills the import.
China's imports of ethanol increased rapidly in recent years and at the same time, refineries were built, which wanted to produce in order to serve the rising demand on the local market. China's ethanol output, the world's third largest producer of this fuel, but was unable to compete with subsidized corn prices in China. Maize is the most important raw material in the production of ethanol.
China changed its subsidies for corn growing in the spring of 2016 and wants to reduce its large State grain stocks that no longer are quality perspective for human consumption, now. Due to fallen prices of corn, ethanol prices in China have already fallen on converted $2.16 per gallon. In the United States, the gallon cost 1.46 USD this week. Adding to the cost of freight and a rate of import duty by 30% the importers can make more money.

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