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Crunch time for Brazil ports as coffee flow hit, sugar faces delays

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© FILE PHOTO: Ships and warehouses containing grains and sugar are seen at TIPLAM (Integrator Port Terminal Luiz Antonio Mesquita) from VLI Multimodal S.A. at Santos port, in Santos, Brazil May 25, 2023. REUTERS/Amanda Perobelli/File Photo

By Marcelo Teixeira

() – Brazil’s commodities export hubs are strained with record volumes of soy, corn and sugar to be moved at a time of the year when rains start to increase in southern ports, according to traders, analysts and shipping data.

Exporters are reporting delays in coffee shipments due to a tight availability of trucks and containers, while loading waiting times for vessels have jumped, resulting in additional costs for traders and delays for the commodities to reach destinations.

Brazil ports have been dealing with high volumes this year, but rains in the south, the largest ever delivery of sugar on the expiration of the October contract in New York and the diversion of cargoes from northern ports to Santos port as a drought cut the Amazon (NASDAQ:) River’s water levels added pressure to the system.

“We are having trouble with container availability,” the chief trader of a large coffee exporter said on condition of anonymity, adding that the situation slowed exports in September.

He said the sugar industry is using a lot more containers, reducing availability.

Raw sugar is usually shipped in bulk, while refined sugar uses containers.

According to shipping data provider Datamar, container use for sugar exports jumped 86% in the year through August versus the previous year, while the number of containers used for coffee fell 5%.

For bulk carriers, the wait to load cargoes jumped.

Shipping agency Williams said the waiting time at CLI, a main sugar terminal in Santos, rose to 33 days on Wednesday from 17 days in September.

ING analysts said some sugar shipments scheduled to depart Brazil in October will likely be pushed to November.

“We hear some vessels are delayed even 25-27 days,” said sugar industry consultants CovrigAnalytics in a note on Thursday.

The line-up of vessels to load sugar in Brazil rose nearly 40% in the last week to around 4.2 million metric tons, 25% more than at the same time last year. About 90 vessels are available at the ports to load sugar.

Buyers are already expecting delays, said a director at one of the largest sugar exporters in Brazil. “But if it starts to rain much, it can get complicated.”

The forecast is for only light rains in the coming days at Santos, with heavier downpours expected from Oct. 28.

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