Sugar Prices
Brazil sugar exports face 'unprecedented' port delays
Brazilian sugar exports may face delays until at least August as a bottleneck at the nation's main port causes an "unprecedented" lineup of ships waiting to load, said the head of logistics at Cosan SA Industria & Comercio, the world’s largest processor of sugar cane.
Sugar prices have surged 22 percent since mid-May and touched an 11-week high yesterday on speculation that demand will increase in Indonesia and China, the world's second-biggest consumer. Raw sugar for October delivery rose 0.8 percent to 17.20 cents a pound at 10:30 a.m. on ICE Futures in New York.
"I have never seen a lineup of vessels like this," Julio Fontana Neto, chief executive officer of Cosan's logistics unit, Rumo Logistica, said in a telephone interview today.
Ports in Brazil, the world's largest sugar producer, haven't been able to keep up with record output of the sweetener. Brazil ships 54 percent of the world's sugar exports, up from about 20 percent a decade ago, the U.S. Department of Agriculture said.
The number of vessels waiting to load at six Brazilian sugar ports, including the Port of Santos, the nation's biggest, rose to 105 yesterday from 100 a week earlier, according to shipping agencies Santos Associados Consultoria Ltda. and Unimar Agenciamentos Maritimos Ltda. The ships will load 3.1 million metric tons of sugar, more than triple the amount on May 3, when the peak export season was starting.
"It's bad," said Erick Mello de Figueiredo, a Sao Paulo- based trader at Terra Futuros, the country's largest commodities brokerage. "The bottom line is that demand is much higher than capacity in the port."
Rumo's rail shipments from mills to ports aren't facing delays, Fontana Neto said.
(Published by Bloomberg – July 8, 2010)