US Green Plains expects China to stick to trade agreement, make ethanol purchases

HOUSTON (ICIS)–US ethanol producer Green Plains said it still expects China to stick to the first phase of the US-China trade agreement that requires ethanol purchases.

Green Plains remains optimistic about China and their role in corn and ethanol purchases, it said in an investor call.

The company also said that China needs to be careful about agriculture purchases, and whether they should step in to buy US products when they are cheap, as this could be seen as “taking advantage of buying cheap products, which could be giving them pause”.

It added that US corn farmers “cannot rely on China. China will never be the answer to the US corn market if ethanol plants are shut or slowing down.”

The company noted that a bigger issue is needing the US Environmental Protection Agency (EPA) to make changes that are positive for ethanol, referring to the biofuels mandate, and its enforcement, as well as implementing E-15 in more states.

Previously, US President Trump and his administration chose not to appeal the the 10th Circuit Court of Appeals ruling that struck down biofuel waivers by the deadline of 24 March.

The US ethanol industry is pushing for the EPA to apply the ruling nationwide, while the oil and gas industry is pushing for forgiveness on the Renewable Fuel Standard (RFS) mandate.

The governors of five US states, Louisiana, Texas, Oklahoma, Utah and Wyoming, also asked the EPA for waivers for their refiners, due to constraints from the coronavirus.

Ethanol is used as a gasoline blendstock, in pharmaceuticals, and in food and beverage applications, such as hand sanitizers and vodka.

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