China is a tiny market for ethanol imports but producers in the United States and Brazil are stirred by an upturn in sales, says Reuters. For the first half of this year, Chinese buyers purchased 56,000 tonnes of the renewable fuel, double the imports for all of 2014. “Traders speculate … that the spike could signal Beijing’s intentions to ease restrictions on its biofuels market that could transform the global $40 billion-per-year ethanol industry,” although it is unclear why China is buying more ethanol.
Imports from Brazil are a result of the recent purchase by state-run trader COFCO of mills there, says Reuters. Other buyers sought ethanol from the United States and South Korea. Some traders said the purchases might have been triggered by temporarily lower prices for imported ethanol compared to the cost of domestic fuel. The Chinese government limits import of ethanol for use as fuel. Ethanol producers in Brazil and the United States are pinched financially, although for different reasons, and would benefit if China becomes a steady buyer.