Ethyl alcohol market in MERCOSUR

Earlier Report Observations

Between 2018 and 2023, the ethyl alcohol market in MERCOSUR shrank by more than half, falling from 2 636 million liters to 1 060 million liters. This decline was primarily driven by a surge in exports, which grew from 1 726 million liters to 2 663 million liters, while imports collapsed from 1 810 million liters to just 55 million liters. The 2018 liberalization of the anhydrous alcohol market, which expanded the number of distributors from about 5 to nearly 200 companies, fostered greater competition and likely supported production growth geared toward foreign sales.

The COVID-19 pandemic in 2020 temporarily boosted demand for ethyl alcohol for disinfection, leading to exceptional rules allowing the sale of 70% liquid alcohol. However, following the end of the national public health emergency, Anvisa reinstated and later reinforced a ban on the over-the-counter sale of 70% liquid alcohol in supermarkets in 2022 and 2024, restricting household consumption. Throughout the period, the market remained shaped by specific technical standards for different uses—fuel, beverages, pharmaceuticals—and the long-standing PROÁLCOOL program, which incentivizes ethanol production as a biofuel.

The formal market also contended with a growing illegal sector, where counterfeit alcohol and non-beverage substitutes diverted consumption away from regulated channels. In response, the industry focused on expanding exports, as seen in the increased international activity from states like Paraíba in 2023, strengthening the national industry's presence abroad despite domestic market contraction.

Production ethyl alcohol in MERCOSUR

In kind, 2017-2020, M l

Top producers of ethyl alcohol, 2017-2020

World map of production of ethyl alcohol, 2017-2020

Ethyl alcohol production in MERCOSUR increased after a two-year decline. In 2019, production reached its lowest point at 2 504 million liters, with the largest annual decline of 22.1% occurring in 2018. By 2020, production rebounded sharply to 3 332 million liters, representing a 33.0% increase from the previous year.

Annual dynamics of production in MERCOSUR in kind, 2017-2020, M l

In value, 2017-2020, M $ US

MERCOSUR's ethyl alcohol production value increased following a two-year decline. The lowest value was recorded in 2019 at 1 322 million US dollars, with the steepest annual drop of 28.8% occurring in 2018. In 2020, production value rose to 1 546 million US dollars, marking a 17.0% increase from 2019. Overall, between 2017 and 2020, production value decreased by 19.6%, which translates to an average annual decline of 7.0%.

Annual dynamics of production in MERCOSUR in value, 2017-2020, M $ US

Exports ethyl alcohol from MERCOSUR

Exports in kind, M l

Ethyl alcohol exports from MERCOSUR grew for the third consecutive year. In 2020, export volumes reached 2 795 million liters, a 36.8% increase compared to 2019. Over the period from 2017 to 2020, exports surged by 99.7%, with an average annual growth rate of 25.9%.

Annual dynamics of product's exports from MERCOSUR in kind, 2017-2020, M l

From 2017 to 2020, the United States, South Korea, and the Netherlands were the three main markets for MERCOSUR's ethyl alcohol exports in volume terms, collectively accounting for 85.4% of total exports.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from MERCOSUR in kind, 2017-2020

Exports in value, M $ US

Ethyl alcohol export revenues from MERCOSUR increased for the third year in a row. In 2020, exports amounted to 1 297 million US dollars, up 20.3% from the previous year. Between 2017 and 2020, export value grew by 57.7%, equivalent to an average annual increase of 16.4%.

Annual dynamics of product's exports from MERCOSUR in value, 2017-2020, M $ US

During 2017–2020, the United States, South Korea, and the Netherlands were the primary buyers of ethyl alcohol from MERCOSUR in value terms. The United States accounted for 52.6% of exports, South Korea for 25.1%, and the Netherlands for 5.8%, together making up 83.5% of total export value.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from MERCOSUR in value, 2017-2020

Imports ethyl alcohol to MERCOSUR

Imports in kind, M l

Ethyl alcohol imports into MERCOSUR declined for the third consecutive year. In 2020, imports totaled 935 million liters, a sharp 34.0% decrease from 2019. From 2017 to 2020, import volumes fell by 49.6%, with an average annual decline of 20.4%.

Annual dynamics of product's imports to MERCOSUR in kind, 2017-2020, M l

Between 2017 and 2020, the United States was the dominant source of ethyl alcohol imports into MERCOSUR, accounting for 93.4% of total import volume.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to MERCOSUR in kind, 2017-2020

Imports in value, M $ US

MERCOSUR's ethyl alcohol import value decreased for the third year in a row. In 2020, imports were valued at 466 million US dollars, down 29.8% from 2019. Over the 2017–2020 period, import value dropped by 52.1%, corresponding to an average annual decrease of 21.7%.

Annual dynamics of product's imports to MERCOSUR in value, 2017-2020, M $ US

From 2017 to 2020, ethyl alcohol imports into MERCOSUR were almost exclusively supplied by the United States, which accounted for 93.2% of total import value.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to MERCOSUR in value, 2017-2020