(Corrects typographical errors in dateline to SAO PAULO and to March 18)
By Chris Prentice and Marcelo Teixeira
NEW YORK/SAO PAULO, March 18 (Reuters) - Royal Dutch Shell Plc has booked a large cargo of Brazilian ethanol to the United States, the strongest sign yet that currency swings, hefty oversupply and weak prices in the world’s biggest producers are roiling trade flows, sources said.
Raizen Energia SA, a joint venture between Cosan SA and Shell, and with Louis Dreyfus Commodities’ Biosev SA, sold a shipment of about 30,000 tonnes destined for Florida, according to five trade sources in Brazil and the United States.
The single shipment is just shy of the total ethanol imports from Brazil in December, which were the highest since May 2014, according to the most recent U.S. government data. A Biosev spokesman confirmed the company sold half the volume to a U.S. destination, with end-March delivery.
Traders say the plunge in the real has made Brazilian ethanol more attractive even as U.S. refineries have ample domestic supplies, offering Shell a short-term opportunity.
The real this week hit 3.2831 against the dollar, its weakest in 12 years and eroding from 2.86 a month earlier, as Brazil’s economy deteriorates.
The deal represents an “escape valve” for ballooning supplies in Brazil, said Tarsilo Rodrigues, a director at Sao Paulo-based ethanol brokerage Bioagencia, even after the government hiked its mandated mix of ethanol in fuel blends.
A spokesman for Shell declined to comment. Its U.S. trading arm, Shell Oil Co, did the transaction.
Raizen did not respond to requests for comment.
In the United States, the world’s top exporter last year, a prolonged pick-up in imports will raise concerns among producers who are struggling with compressed margins and seeking homes abroad for an estimated 3 million tonnes of excess biofuel amid uncertainty over U.S. renewable fuels policy.
“Everyone’s grabbing at straws for demand for corn (products),” said Steve Nicholson, an analyst with Rabobank AgriFinance in St. Louis, Mo.
Benchmark U.S. cash ethanol prices in the Midwest ETN-MIDCO are down 15 percent year-to-date to about $1.40 a gallon, under pressure from weak gasoline prices, and trade at a 30-cent premium in Florida, according to traders.
Ethanol in Brazil, basis U.S. dollars, ETN-ANFUW-USD has plunged 17 percent to 1.60 a gallon, its weakest in more than a year, according to a weekly price index from Cepea Esalq, a University of Sao Paulo research institute. In reais, however, that was at just a three-month low. (Editing by Grant McCool)