Brazil ports under strain to cope with sugar deman

Date 08-Jul-2010        Source THE FINANCIAL EXPRESS        Reporter Reuters        News Id 215

London: Stretched infrastructure at Brazilian ports is expected to cope with mounting ship delays as vessels wait to load sugar and freight rates could find support from growing global demand for the country’s new crop. Appetite for sugar from Asia, Africa and North America has led to a long ship line-up at ports in Brazil, which provides at least 80% of the world’s sugar at the peak of its harvest in the centre-south in the July-September period. The world is becoming too dependent on Brazilian supplies. If Brazil has a problem, we will see quite a reaction to it, said James Kirkup, director and head of sugar brokerage at ABN AMRO Markets (UK). As the peak of the cane harvest approaches in the centre-south of Brazil, ships entering Santos port are having to wait around three weeks, rather than the usual 10 days at this time of year to move cargoes out, physical sugar traders say. We are seeing record sugar shipments from Brazil. There is very strong demand, said Toby Cohen, head of research at sugar group Czarnikow. Brokers said a fire at a warehouse in Paranagua port last month disrupted sugar shipments. The Paranagua fire shows the vulnerability of Brazil to the problems of their logistics, said Jonathan Kingsman, managing director of sugar consultancy Kingsman SA. Brazil’s port logistics are being stretched. Brokers and analysts believed Brazilian ports could cope with the pressure of the physical demand as long as there was no impact from a natural calamity, such as adverse weather. More from Commodities