by Chris Prentice & Reese Ewing Reuters
August 05, 2016
NEW YORK/SAO PAULO, Aug 4 (Reuters) - U.S. ethanol plants and traders are rushing to sell biofuel to Brazil as tightening supplies and logistics in the South American market give the world's top producer a rare opportunity to ship south during the peak sugar cane harvest, sources said.
U.S. ethanol plants are pumping out a record 1 million barrels per day taking advantage of cheap and plentiful corn feedstock, pushing domestic prices to three-month lows.
But they are finding unexpected demand in rival Brazil, where production is falling short of expectations as skyrocketing sugar prices have spurred mills to crush more cane into sweetener rather than make ethanol.
That has opened an arbitrage window at an unusual time of the year, highlighting the diverging market conditions between the world's two top ethanol producing nations.
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