China takes huge jump in ethanol exports

Flying under the radar until now has been China’s role in the international ethanol market. The world’s most populous country says it will export in excess of 500,000 tons of ethanol in 2006, an average of 11,000 barrels a day.

If this is a surprise to you, you’re not alone. Many industry watchers didn’t figure on China being an ethanol player. The country exported next to no ethanol last year. However, ever mindful of the changing winds of international markets, China has been quietly ramping up its ethanol exports, primarily to take advantage of an expected boom in consumption in the United States.

From a total of just four ethanol plants in 2005, the government plans to have a few thousand by the end of the year. The majority of those plants are reporting a huge desire to export most of their product as well. The reason for doing this is clear: to make money. But you might think that China would want to hang on to some of that ethanol and use it in their own gas-powered vehicles, the number of which is expanding seemingly exponentially. Still, all those exports are good news for American oil-burning consumers.