Brazil Sugar Producers May Face Increased Delays at Ports

Sugar producers in Brazil, the world’s biggest exporter of the sweetener, may face increased delays at ports this year as heavy rain stalls the harvest, concentrating shipments in peak months, a processor said.

Most sugar-cane crushers probably won’t start processing the tropical plant until late April or May after above-average rain in Brazil’s Center-South delayed the harvest this year, said Paulo Jose Mendes Passos, commercial director at Acucar Guarani SA, Brazil’s third-biggest sugar and ethanol producer. Last year, crushers started work in March and early April.

The delay is set to worsen bottlenecks at ports this year as growers rush to ship the sweetener, Passos said. A record 600 ships loaded sugar last year at Brazil’s Santos port, which handles about 80 percent of the nation’s shipments of the sweetener, according to the port’s press office.

“We may face bigger problems at ports this year,” Passos said March 28 in a telephone interview from Sao Paulo. “Shipments will be concentrated in the July and October contracts, when the lineup tends to be much bigger.”

Sugar shipments from the Santos port increased 20 percent last year from 500 ships in 2009 after adverse weather cut output in sugar-producing countries such as Thailand, Australia, Russia and Pakistan, the port’s press office said.
Drought

A drought last year pared cane output in the Center South, where about 90 percent of Brazil’s sugar and ethanol is produced, he said. Cosan SA Industria & Comercio, whose joint venture with Royal Dutch Shell Plc is the world’s largest cane processor, said today in an e-mailed statement that most of its mills won’t begin crushing this year until mid-April.

Raw-sugar futures for May delivery fell 2.2 percent to 26.42 cents a pound at 10:25 a.m. on ICE Futures U.S. in New York. The price has surged 48 percent in the past year.

Guarani may produce 1.5 million metric tons of sugar this crop year and export 40 percent of that, unchanged from last year, Passos said.

source: bloomberg