Feb. 4 (Bloomberg) -- Bunge Ltd. is exporting U.S. corn-based ethanol to Brazil, the world’s second-largest consumer of the biofuel, according to two people with direct knowledge of the deal.
Bunge, based in White Plains, New York, is shipping about 12.5 million liters (3.3 million gallons) of the fuel to the Port of Itaqui in Brazil’s northeast, according to the two people, who asked not to be identified because terms aren’t public. The ethanol is being carried on the vessel Songa Hawk, which is scheduled to arrive on Feb. 12.
“U.S. ethanol is cheap and we need ethanol to tap booming domestic demand,” said Mauricio Muruci, an analyst with Porto Alegre, Brazil-based research firm Safras & Mercado. “We will keep importing at least until March, when the harvest starts.”
Motor fuel consumption in Brazil rose 5.1 percent in the first 11 months of 2013 from the year-earlier period, data from the country’s oil regulator show. About 61 percent of passenger cars in Brazil are flex-fueled, and the remainder run on pure ethanol or on E25, a blend of gasoline and 25 percent biofuel, data from sugar and ethanol industry group Unica show.
Brazil’s center south produces about 90 percent of the country’s sugar and ethanol. Poor logistics in Brazil, which is larger than the continental U.S., make it cheaper for blenders in the northeastern region to import ethanol from North America.
Susan Burns, a spokeswoman for Bunge, declined to comment.
The U.S. is the world’s top consumer of fuel ethanol.
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