Su­gar price spikes

Port Douglas & Mossman Gazette - - FRONT PAGE -

A FIRE in Brazil that rav­aged the su­gar ter­mi­nal of one of the world’s largest su­gar traders is not ex­pected to pro­duce long term ben­e­fits for Aus­tralian grow­ers.

The fire at the San­tos port started in the con­veyor belt sys­tem and de­stroyed 180,000 tonnes of su­gar and six ware­houses.

Reuters re­ported that the fire put 10 mil­lion tonnes of ex­port ca­pac­ity off­line for six months or more.

De­spite re­sult­ing in a 6 per cent spike to the su­gar price, Aus­tralian grow­ers are not ex­pect­ing the fire to re­sult in sig­nif­i­cant gains. Chair­man of Cane­grow­ers Moss­man Drew Wat­son said there could be small short­term gains for lo­cal grow­ers.

‘‘Prices aren’t dis­as­trous at the mo­ment, nei­ther are they won­der­ful,’’ Mr Wat­son said.

‘‘While ru­mour has it that lo­gisit­i­cally it’s go­ing to be very hard to main­tain the sup­ply from Brazil and some mills may be forced to close, there’s also talk that In­dia has a large stock­pile and may use it as an op­por­tu­nity to off­load some of it on the Asian mar­ket.

‘‘The Aus­tralian dol­lar and what it’s do­ing will have a greater ef­fect on the Aus­tralian ex­port mar­ket.’’

US- based Price Fu­tures Group be­lieved the ben­e­fits will be stronger in Asia. ‘‘We saw a short-term spike in prices, but as the lo­gis­ti­cal is­sues get worked out, we will see this go away,’’ the Group’s se­nior an­a­lyst Jack Scov­ille said. ‘‘It will hurt world avail­abil­ity for the short term, though, and prob­a­bly help In­dia and Thai­land sell su­gar at slightly bet­ter prices than they might have been able to do oth­er­wise.’’

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