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A fire last week at Copersucar’s sugar terminal, the largest in Brazil, means the company is likely to need to find space elsewhere from which to export the sweetener next cane season while it rebuilds the warehouses. |
Copersucar lost 180,000 tonnes of sugar, or 10% of Brazil’s monthly exports to the fire. With global markets flush with a surplus in sugar, the destruction its five warehouses is a bigger challenge for the company and for sugar importers.
When Copersucar set out in 2011 to double its Santos Port terminal capacity to 10mn tonnes a year, it took until this June to complete the work, two years later.
“The size of Copersucar’s export terminal will make it difficult to finish construction in less than a year, so we will not be back to the same export capacity soon,” Tarcilo Rodrigues at analysts Bio Agencia said.
The port has not yet received any communication from Copersucar on the firm’s reconstruction plans for the terminal, he added.
Rodrigues said Copersucar will likely try to ship more sugar out of Paranagua Port about 400km to the south of Santos and perhaps from the Rumo terminal next door, which is controlled by Cosan, or Noble’s.
Copersucar represents 47 sugar mills in Brazil and recorded revenue of $4.1bn in 2012. The company had hoped to expand its annual trading volume to 9mn tonnes this year.
In 2012, Copersucar had exported 7mn tonnes of sugar of the 24mn that Brazil exported.
Copersucar is still studying the damage and hasn’t made estimates on how long it will take to rebuild the warehouses, said Leonardo Aragão, a spokesman for the company. He did not comment on what the firm would do in the meantime.
Huge global stockpiles in sugar are giving some wiggle room to cover shipments that Copersucar will need to make in the months to come, traders said.
This crushing season is 80% complete in Brazil’s main centre-south region, with only about two months left until harvest winds down, so more affects will be felt next season when harvest peaks again in May through September.
“Most of this year’s sugar has been exported but the effects will be felt on next year’s exports. Ship lineups may grow at Santos during the peak of sugar crushing,” said lead sugar analysts Mauricio Muruci at Safras e Mercado consultants.
In 2010, ships waited for over a month to load sugar during the peak of harvest in June due to a backlog at Santos. Without Copersucar’s capacity these delays may be more likely to happen again, analysts said.