San Francisco: Brazil will ship about 30,000 tonnes of ethanol to the US in a single shipment arranged by Royal Dutch Shell’s trading arm, according to Reuters.
The amount is equivalent to an average month’s worth of normal trade in the fuel from Brazil to the US, and experts say the transaction reflects the weakness of the real, Brazil’s currency.
A big loss in value of the real made the deal attractive, economists said, even though the US has a glut of home-produced ethanol and itself was the world’s biggest ethanol exporter in 2014.
Ethanol is a biofuel derived from corn or sugar cane.
Shell’s US trading arm Shell Oil Co made the deal, helping producers Raizen Energia (a joint venture between Cosan and Shell) and Louis Dreyfus Commodities’ Biosev complete the sale to as-yet-unnamed US customers for delivery in March.
Brazil’s economy is in turmoil and the real this week fell to 3.2831 against the dollar, its weakest in 12 years and sharply down from 2.86 in February.