US, Brazil see jump in ethanol exports as consumers seek to boost fuel supplies

• U.S. exported 638 million gallons of ethanol in Q1 2026, up 20% year-over-year, with an additional 1 billion gallons of production capacity expected in 12-18 months
• Brazil's ethanol exports projected to reach 2.2 billion liters (581 million gallons) this season, more than double the previous season's 1 billion liters, with total production hitting a record 41.4 billion liters
• Industry leaders expect sustained demand even after potential Hormuz resolution, as Asian countries raise ethanol blending rates and governments prioritize energy security to reduce dependence on Middle Eastern oil

Summary

Key Developments:

The United States and Brazil, the world's two largest ethanol producers, are experiencing significant export growth driven by global demand for fuel security amid ongoing geopolitical tensions.

Key Figures:

• U.S. ethanol exports increased 20% in Q1 2026, reaching 638 million gallons, building on record shipments in 2025
• Brazil's exports projected to more than double to 2.2 billion liters (581.1 million gallons) in the 2026/27 season, up from 1 billion liters previously
• Brazil targeting record production of 41.4 billion liters this season, a 4 billion liter increase
• U.S. plans to add 1 billion gallons of production capacity within 12-18 months

Market Drivers:

The surge follows heightened concerns over energy security, particularly amid the Strait of Hormuz crisis. Asian countries are increasing ethanol blending rates in gasoline but lack sufficient domestic production capacity, creating import demand. Industry leaders believe this elevated demand will persist even if geopolitical tensions ease, as nations seek to diversify away from Middle East energy dependence.

Market Implications:

This trend benefits U.S. corn producers and processors, along with Brazilian sugarcane growers and mills, as increased ethanol production drives demand for feedstocks and supports commodity prices. U.S. ethanol currently offers competitive pricing versus gasoline. The development revives earlier plans by Presidents Bush and Lula to establish a global ethanol market, potentially reshaping biofuel trade dynamics and strengthening energy security frameworks worldwide.