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China emerges as major ethanol exporter

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China emerges as major ethanol exporter

http://www.iht.com/articles/2006/09/05/business/ethanol.php

BEIJING: China is unexpectedly emerging as a major exporter of ethanol as record crude oil prices and a U.S. deficit in the biofuel have pushed up its international price, triggering an investment boom.

Industry officials said China's 2006 exports of ethanol, or ethyl alcohol made largely from corn or cassava, were set to exceed 500,000 tons.

Shipments may reach 900,000 tons, some traders say. It had virtually no ethanol exports for fuel last year.

Most of the ethanol cargoes go directly or indirectly to the United States because of a switch this year to use ethanol as an additive for cleaner gasoline. Some cargoes are dehydrated in Caribbean countries for use in the United States, helped by favorable taxes.

"We predict it may reach 900,000 tons," said a trader at an international house, referring to exports in 2006."But due to recent softening in the international market, maybe we will revise the number down, possibly by around 100,000 tons."

However,

not many are convinced that China can maintain a competitive edge for fuel ethanol exports in the future, especially if it has to keep importing cassava and since there is a building boom of ethanol plants in the United States.

China is the world's third-largest ethanol producer, behind Brazil and the United States, but in the past has used most of its output domestically, largely for use in alcohol or chemicals but increasingly as a gasoline blend in agricultural provinces.

For many, Chinese exports of fuel ethanol came as a surprise, as there were only four ethanol fuel plants until 2005.

The product is heavily subsidized by Beijing, which is eager to develop alternative fuels to cut China's dependence on imported oil.

Officials said a window of opportunity had emerged because of a surge in global ethanol prices, spurred in part by a U.S. shortfall estimated at two million tons this year. Prices climbed above $5 a gallon in May before receding toward $2.50.

Coupled with high oil prices, this has encouraged small producers who process ethanol for use as food to dehydrate it for use as fuel, they said. Many have expanded capacity and built new plants.

Data and details of the trade are patchy, partly because it is difficult to distinguish between fuel ethanol and other alcohols.

But an official from China Songyuan Ji'an Biochemical Sales, based in the country's top corn-producing province of Jilin in the northeast, said it alonewould export 300,000 tons of ethanol -all of its output - this year.

Customs data showed exports of ethanol had risen 336 percent in the first seven months of this year from a year earlier.

The officials said ethanol plants were also sprouting across the country, especially with the National Development and Reform Commission, the country's top planning body, predicting Chinese consumption of ethanol as fuelwould reach six million tons by 2020.

It was unclear how much ethanol China was producing this year, in addition to 1.02 million tons by the four government-sponsored plants in the provinces of Jilin, Henan, Heilongjiang and Henan.Ji'an is also expanding its capacity to 450,000 tons by the end of 2006.

Yet the Ji'an official said China's total alcohol capacity, including fuel ethanol, would climb by three million tons to reach 10 million in 2006.It rose by two million tons last year.

"A lot of plants are being built," said a trader, adding that some of the new plants were focused on the export business.

Another trader at a Beijing-based international house estimated there were now a few thousand producers.

To avoid undermining the country's food security, Beijing is encouraging a shift in feedstocks away from grains, like corn, to non-grain crops, like cassava, which is also known as tapioca.

In a sign of rising fuel ethanol production, one cassava trader said China's cassava imports were heading toward 4.4 million tons in 2006, up about 36 percent from a year earlier.

China National Cereals, Oils & Foodstuffs Import & Export, the country's top state-owned trader, is also building an ethanol plant with production capacity of 200,000 tons a year in the southern region of Guangxi, China's biggest cassava-producing province.

State media have said it was part of a plan by the Guangxi government to build annual production capacity of a million tons.

"You have to think if this export will last," said the second trader. "In the United States, they have lots of projects under way. The demand gap will narrow significantly next year."
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Wow I had no idea. What does a ton of ethanol translate to equivalent gallons of gasoline?
500,000 tons a year is around 11,000 barrels a day.

Which is 462,000 gallons a day.


http://www.eia.doe.gov/kids/energyfacts/science/energy_calculator.html
Ethanol from CHINA?! Does it contain LEAD???:lol:
Wow. I guess we will start caring about them again. :rolleyes:
I don't get it. Why don't the Chinese use the ethanol themselves to help their energy needs? I guess the US will pay dearly for it and China still has a billion people living in the Stone Age.
The air quality in Beijing is so low that people that organize stuff for the Olympics are thinking of post-poning out-door activities.



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