The O Globo newspaper reports that Brazil’s state-run oil firm Petroleo Brasileiro SA (PBR), or Petrobras, last week made its first shipment of ethanol to the United States last week.

According to thew publication, a vessel with 12,000 cubic meters of ethanol left the port of Rio de Janeiro for the U.S., and that Petrobas plans another shipment of 20,000 cubic meters of ethanol to the U.S. this month.

Despite imposing an import tax of more than $0.50 per gallon against Brazilian ethanol, the U.S. is Brazil’s top ethanol export market.  Petrobras said it should export around 850 million liters of ethanol in 2007, which includes markets like Nigeria and Venezuela and test volumes to Japan.

According to preliminary data from the federal Energy Information Administration, monthly ethanol imports to the U.S. fell 8.4% to 939,000 barrels in February, the lowest level seen since last May.

February ethanol imports averaged 31,300 barrels a day, down from 33,000 barrels a day in January.

Last May, U.S. fuel marketers were beginning to ramp up their use of the plant-derived gasoline additive.  Refiners greatly increased their ethanol use because a federal mandate for its use began and because gasoline manufacturers were ending their use of the petroleum-based additive methyl tertiary butyl ether.  Refiners greatly increased their ethanol use after a federal law was passed mandating its use.  Imports of 681,000 barrels in May, 2006 more than doubled by June and hit a peak of 3.203 million barrels in August before easing to 1.191 million barrels in January, 2007.

Most of the volume - 10 out of 14 shipments - was bound for ports in New Jersey. Three shipments went to Hawaii and one shipment of 1,000 barrels from Canada went to North Dakota. Four shipments totaling 572,000 barrels sailed from Brazil and six, totaling 212,000 barrels, came from El Salvador. Two ships came from Jamaica and the last sailed from Trinidad.

 
The number of ships is close to the Williams shipping agency’s estimate issued in late March. The Brazilian agency said 18 ships were loading ethanol in February.  Williams’ estimate for April loadings is higher, at 22 ships.

Brazil President Luiz Inacio Lula da Silva said yesterday that he will push President Bush to reduce the United States’ $0.54/gallon ethanol import tariffs at a meeting later this week in Sao Paulo, where the two presidents are expected to sign an accord to spread the use of ethanol in the region during the visit. 

 
“High tariffs placed by the U.S. on Brazilian ethanol make no sense,” Lula said during his biweekly radio program.  “I think that we are close to an accord (in the Doha round) which could favor agricultural nations - principally those that don’t have the chance to compete globally,” said Lula, who also added that Bush is key to progress in the talks.

 
Sergio Gabrielli, the chief executive of Brazil’s state-run oil firm Petroleo Brasileiro SA (PBR), or Petrobras, said yesterday his company won’t export ethanol to the U.S. if the import tariff remains in place: “The U.S. has the world’s biggest ethanol production and its biggest gasoline consumption…But it’s practically impossible to do business in ethanol with the currently existing tariff.”  Petrobras produces ethanol and also sells it domestically and to Venezuela and Nigeria; Petrobas is also in talks about major ethanol exports to Japan.

According to preliminary data supplied by the federal Energy Information Administration, ethanol imports to the U.S. in October fell for a second consecutive month.
 
October imports of the plant-derived gasoline additive stood at 1.505 million barrels, down from 2.194 million barrels in September, and down from the record-high 3.203 million barrels in August. The October level is also below June and July import levels.
 
Brazil provided 824,000 barrels, down from 1.318 million barrels in September.  The next-largest U.S. supplier in October was China, at 184,000 barrels, down from 339,000 barrels the previous month.  Imports from El Salvador, Costa Rica, Canada and Trinidad were also down.
 
U.S. cash market ethanol has risen in response to tighter supply but traders are expecting an increase in imports during January, which accounts for barrels pricing at increasingly lower levels for January-delivery barrels.

U.S. legislation passed late last week included a two-year extension of the 54-cent-a-gallon tariff on imported ethanol. The tax was set to expire in October 2007 but will now continue to be imposed until January 2009.