Sugar price spikes
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.’’