Brazil poised to benefit from ethanol imports beginning in December

Ethanol imports will become cost-advantageous starting in December, even if the current 18% tariff remains in place until then, and some traders have already begun booking vessels to bring the U.S. product into the Brazilian market. Based on price curves, the import window should remain open through March, according to projections from Datagro presented during a consultancy event.

The outlook considers projected ethanol price curves in both Brazil and the United States, as well as foreign exchange projections for the coming months, said Plinio Nastari, president of Datagro. The calculations are based on the cost of landing the product through the Port of Suape (PE).

According to him, importing ethanol is already advantageous today for those clearing cargo through the Port of Itaqui in Maranhão, where tax incentives apply to incoming shipments.

The pressure comes from both low prices for U.S. ethanol on the Chicago Board of Trade and the recent appreciation of the Brazilian real, which is making the imported product even cheaper.

The prospect of U.S. ethanol entering Brazil competitively, even with the tariff in place, increases pressure on Brazilian producers, who have been facing squeezed margins in the sugar market and are shifting toward biofuel production to secure positive margins this season.

If Brazil were to fully remove the 18% tariff currently in force as part of negotiations with Donald Trump, the import window would already be open and would likely remain so at least through April.

Surplus in the United States

According to Nastari, the United States currently has an ethanol surplus, reflecting excess corn production. Currently, 33.4% of the U.S. corn crop is directed to ethanol production.

While ethanol output in the U.S. is rising, domestic demand is weak due to lower gasoline sales, since ethanol is blended with fossil fuels. According to Nastari, fuel sales in the U.S. are falling because of the growth in electric vehicle sales and because Americans are “driving less.”

Imports this season

Brazil’s ethanol imports have already accelerated in the 2025/26 season, even though the U.S. import arbitrage window remained closed until now. This is because a significant portion of ethanol imports has been coming from Mercosur countries, which are exempt from the 18% tariff.

From April to September, Brazil imported 85% more ethanol compared with the same period last season. Of the total imported, 51% came from the United States, 32% from Paraguay, and 17% from Argentina.

Source: Globo Rural

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