Insight Focus
US ethanol exports could rise significantly as new markets open. A potential Mexico deal could create a USD 1.5 billion opportunity, while Brazil may resume imports in early 2027 as US ethanol becomes more competitive. USDA expects export values to reach USD 5.4 billion in FY 2026 and rise further to USD 5.5 billion in FY 2027.
Mexico Moves Closer to Opening Market to US Ethanol
Exports of US ethanol to Mexico and Brazil could surge significantly if trade deals and favourable government policies are realised.
US Secretary of Agriculture Brooke Rollins recently reported that an ethanol deal with Mexico is close to being finalised. USDA said the deal represents a USD 1.5 billion market opportunity for ethanol, which could increase exports by 32%.
Rollins announced on October 26 that the US and Mexico had reached an initial deal to unlock the Mexican market to US ethanol.
“The Department of Agriculture looks forward to collaborating with Mexico on taking the necessary steps to implement this deal in the months ahead,” said a USDA spokesperson.
News sources reported that Mexican officials were recently in Houston, Texas, for a technical site visit. The USDA said the announcement follows discussions in Mexico in August between Mexican officials and Luke Lindberg, then-Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs. Lindberg was joined by the US Grains Council, the Renewable Fuels Association and Growth Energy for meetings in Mexico City to discuss the country’s ethanol expansion.
Rollins said she has been working directly with Mexican President Claudia Sheinbaum and her team on the deal.
Brazil Could Resume US Ethanol Imports in 2027
News sources recently reported that Brazil could resume imports of ethanol from the US through the port of Suape in Pernambuco state in January 2027, as seasonal market conditions are expected to make imported supplies more competitive.
A report by StoneX, carried by Maritime Logistics Professional through a Reuters-syndicated feed, said the first quarter of 2027 could follow a pattern similar to the corresponding period in 2026, when ethanol imports entered Brazil through Suape, a major port serving the country’s Northeast region.
Port of Suape, Pernambuco
Brazil’s imports of US ethanol rose sharply during the first three months of 2026, pushing the country’s ethanol trade balance into deficit. Imported US ethanol remained cheaper than domestically produced ethanol in Northeast Brazil despite an 18% import tariff.
Source: EIA
According to analysts, the ethanol trade balance turned positive from April, with September recording the largest monthly surplus during the period analysed by StoneX.
USDA Forecasts Further Growth in Ethanol Export Values
Back in August, the USDA increased its forecast for fiscal year (FY) 2026 ethanol export values in its latest quarterly Outlook for US Agricultural Trade report. The agency expects ethanol export values to continue growing in FY 2027.
The USDA projected that the value of FY 2026 ethanol exports will reach USD 5.4 billion, up nearly 6% compared with the USD 5.1 billion forecast made by the agency in its May quarterly outlook. The value of FY 2027 exports is currently expected to increase to USD 5.5 billion, representing an increase of approximately 2%.
FY = Fiscal Year
Source: USDA
