• IKAR in Mass Media

 

 → IKAR in Mass Media → #494

IKAR in Mass Media

Brazil Traders Pay Premium for Santos-Shipped Sugar on Freight

12 июня 2012 года

June 12 (Bloomberg) -- Sugar traders in Brazil, the world's largest producer, are paying a premium for the sweetener shipped from the port of Santos because freight costs there are lower than its biggest rival's, according to Kingsman SA.

Sugar for loading in Santos, Brazil's biggest port, was fetching a premium of $2 to $3 a metric ton to the sweetener loaded at the second-ranking Paranagua because of the freight-costs difference, the Lausanne, Switzerland-based broker and researcher said in a report e-mailed today. Shipping from Santos can be as much as $4 to $5 a ton cheaper, Kingsman said, as Brazil exports more raw sweetener to Asian countries including China and less to traditional buyer Russia.

The disparity was boosting the amount of sugar waiting to be loaded onto vessels in Santos. The amount of sugar awaiting loading at the port yesterday was more than triple that at Paranagua, according to data from shipping agency UnimarAgenciamentosMaritimos Ltda. Raw sugar prices rose 4.7 percent last week as rains disrupted harvesting and delayed shipments.

"Over the past couple of weeks, physical sugar traders have been paying a premium for raw sugar loading from Santos rather than from Paranagua," Kingsman said in the report. "This has largely been driven by the freight."

Exporting from Santos is cheaper on a per-ton basis than Paranagua because relative draft limits mean that ships of the same size loading at Santos can take more cargo, according to Stephen Baldey, London-based director of O.P. Secretan LLP, a specialist in sugar shipbroking.

Reflecting Difference

"In the Supramax market, there is a freight differential between Santos and Paranagua due to the difference in drafts," said Baldey. "A vessel that can load 50,000 to 52,000 tons in Santos is likely to shut out 4,000 to 5,000 tons of cargo if loading in Paranagua and the freight rates have to reflect this loss of cargo intake."

Draft is the depth at which a ship can sit in the water. The cheapest way to ship sugar to the Asia Pacific region is using Supramax vessels, according to Kingsman. The dry-bulk ships have a capacity of about 55,000 to 58,000 deadweight tons. The voyage cost of shipping a cargo of 50,000 to 52,000 tons of sugar from Santos to south China is about $50 a ton, Baldey said.

Ships waiting at Santos yesterday were set to load 1.43 million tons of sugar, while vessels at Paranagua would ship 418,100, according to Unimar. All vessels heading to China are scheduled to leave from Santos, the data showed.

With Russia relatively absent as a buyer this year, sugar from Brazil's center south region, the main growing area, is increasingly going to the Asia-Pacific countries, according to Kingsman, and shipments from Santos, with its draft advantage, benefit from cost savings on the route.

China Imports

"Traditionally shipping raw sugar to Europe, Africa, South America destinations, the draft difference between the two ports did not matter as much as today," Fabienne Pointier, an analyst at Kingsman, said in an e-mailed response to questions.

China's sugar imports will climb by 1 million tons to 3.1 million tons in the current season, according to the International Sugar Organization in London. Russia's imports will fall to 600,000 tons in the same period, down from 2.5 million tons a year earlier, the Moscow-based Institute for Agricultural Market Studies, or Ikar, estimates, after a jump in the country's domestic production.

Source: Bloomberg  |  #sugar   |  Comments: 0   Views: 171

There are no comments yet. Be the first!

Only authorized users can comment.