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Brazilian ethanol has proved a mixed blessing for struggling American corn growers and the carriers who own the trains, ships and trucks that carry their product this year. The good news is that almost all the ethanol needed in Brazil (beyond its own production) is imported from the United States. The bad news is that that amount is predicted to drop in 2019 from last year. According to the Brazil Biofuels report from the U.S. Department of Agriculture's (USDA) Foreign Agricultural Service, which was released on August 9, Brazil will import around 1.2 billion liters of ethanol this year. This is a 495 million unit decrease from last year's 1.695-billion-liter total. Though the decline appears precipitous, the amount of the plant-based alcohol that Brazil will import is well over the 10-year rolling average of around 834 million liters.

Ethanol use in Brazil is expected to grow by 4 percent in 2019 compared with 2018; the estimated figure is 34.45 billion liters, a 1.6-billion-liter increase. Brazil's biofuel usage has climbed steadily in the last decade and last year was no exception. Demand for ethanol in Brazil for 2019 is growing faster than production, currently estimated at 33.93 billion liters. This figure represents a 2.19-billion-liter increase from 2018.  But this production deficit might not last long as over new 40 biofuel plants have requested certification for 2019. 

Most of Brazil's ethanol imports from the United States are in the form of corn ethanol; almost all Brazilian ethanol production is from sugarcane. Brazil has a total of 370 sugar ethanol factories, which is up one from 2018. Predicted capacity for 2019 is 43.1 billion liters, which remains unchanged from 2018. However, most factories rarely work at capacity, because they can only produce as much ethanol as is proportional to the amount of sugar they can purchase.

This sugarcane supply for ethanol producers is dependent upon the usual factors in agricultural production – weather, blight, crop failures, etc. However, the most fundamental of the unknowns for supply is the decision by the individual cane growers and the prices they can ask from the ethanol production facilities compared with other purchasing outlets. In Brazil, commercial grade gasoline is mandated to contain 27 percent ethanol, which can place a burden on sugarcane growers but also virtually guarantees a market.

The USDA Brazil Biofuels report is released annually, but the 2019 version is a little different. In December of this year, the country is scheduled to implement the long-awaited National Biofuels Policy of Brazil, commonly referred to as RenovaBio. The RenovaBio program was implemented in December 2016 by Brazil's Ministry of Mines and Energy (MME). The intention of the program is to support the nation's COP21 (also known as the Paris Climate Agreement) goals, which the country also put in place in 2016. But even with the organic expansion of biofuel usage and the new mandates that will go into effect next year through the RenovaBio program, Brazil is expected to remain a net exporter of ethanol. Brazil is on track to export around 1.8 billion liters of ethanol this year, an increase of around 11 percent over 2018, which came in at 1.62 billion liters.

In addition to ethanol, Brazil also is experiencing growing demand for biodiesel. Biodiesel production in the country has more than doubled in the past decade. This growth more than covers the country's demand for the product leading to virtually no imports since around since 2012. However, Brazil is also not an exporter of biodiesel. Biodiesel is essentially vegetable oil produced from plant and animal oils and fats. Brazil is expected to produce around 5.8 billion liters of biodiesel this year, which is an 8 percent increase over 2018.

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