China is unexpectedly emerging as a major exporter of ethanol as record-high 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 (625 million liters or about 11,000 barrels per day).
Shipments may reach 900,000 tons (1.13 billion liters or 19,000 bpd), 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 due to a switch this year to use ethanol as an additive for cleaner gasoline. Some are dehydrated in Caribbean countries for use in the U.S., helped by favorable taxes.
"We predict it (2006 exports) may reach 900,000 tons," said a trader at an international house. "But due to recent softening in the international market, maybe we will revise the number down, possibly by around 100,000 tons."
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