Brazilian   ethanol     imports   surged in January with 164.6 million liters entering the country, 

almost twice as much as in December, Secretariat of Foreign Trade data showed Wednesday

. The  increase   in  January imports was anticipated, given the plunge in US ethanol prices to 

their  lowest  levels since 2005 and higher Brazilian domestic prices as the key Center-South 

region entered its intercrop season. 

This  allowed  the  arbitrage   window to open despite Brazil's recently imposed 20% tariff on 

quarterly volumes greater than 150 million liters. 

"We are expecting a flood of imports in the first quarter," a trader said Wednesday. "Around 

300 million liters more than the usual expected volume." 

A  large  Brazilian  trading  company  estimated that the total volume of anhydrous ethanol 

imported from US in Q1 might reach 712,000 cu m, with 270,000 cu m arriving through the 

Center-South ports and the balance of 442,000 cu m through North-Northeast ports. 

Estimates from S&P Global Platts Analytics point to Brazilian imports from the US of 650,00

0 cu m in Q1, split between 250,000 cu m entering via the Center-South and 400,000 cu m 

through the North-Northeast. 

After Q1 ends, imports from US are expected by a source to drop to 120,000-140,000 cu m per month. 

Based on S&P Global Platts' Suape delivered ethanol price assessments, the import arbitrag

e appears to have been open -- even with the 20% tariff -- since early December. S&P Global 

Platts started publishing weekly prices for ethanol in Northeast Brazil on November 10, 2017.