Brazil feeling the sugar rush

A knock on effect from declining sugar output in Thailand (which is only now exporting around three-quarters of last year’s amount), Brazil is expected to take up the slack and increase its exports by 17%, or 4.1m tonnes, explained Andrew Winkler of Commodore Research.

However congestion may yet worsen as the cane harvest reaches its peak, although a terminal operated by sugar and grain producer Noble at Santos port opened last year seems to be taking the worst of the pressure off. This has a static warehousing capacity for 90,000 tons of sugar and a ship loader that, according to Noble, can fully load a panamax ship in less than 48 hours.

Mr Winkler says the knock-on effect may travel yet further. He predicted: “We will likely see opportunist ship owners moving to different ports, particularly in Australia, probably clearing the Brazilian congestion in the upcoming weeks. Two ports that will most likely be affected will be the Port of Townsville and the Port of Lucinda, which on an annualised basis currently export approximately 49% of all sugar coming from Australia.”

Further, Mr Winkler added the extra loading from sugar in Australia could lead to clashes with other bulk cargo in certain cases. For example, in Townsville an additional amount of small-sized iron ore carriers are also loading up, a picture which might well lead to an increase in port congestion.