Selling Ethanol to China Just Got More Complicated

Shutdown and The Markets
A variety of gasoline options, including flex fuel, at this service station in Erie, PA (July 2018) ( Wes Mills )

As some ethanol operations throttle production or shutter plants, Peter Meyer with S&P Global Platts isn't sold on Chinese demand rescuing the biofuel and corn industries.

"They don't have the production capacity so we'd have to sell [ethanol] as a finished product which would be great," says Meyer. "But, I temper my enthusiasm."

Speaking to AgDay host Clinton Griffiths about the government shutdown, global economy and potential for added ethanol demand from China, Meyer says the auto industry just announced major research initiatives for electric vehicles.

"At the Detroit Auto Show it was announced that the major car manufacturers are going to spend $300 billion on what we call EV research and development," says Meyer. "The scary thing about that is they've earmarked $150 billion of that just to China."

Meyer says that could erode potential for ethanol growth in China over the next decade.

"I don't know necessarily that the Chinese ethanol mandate is going to be the savior for corn," says Meyer. 

Hear more from the conversation in the video above. 

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