Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you a link to reset your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you a link to reset password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Agriculture | Shipping

Brazilian sugar cash premiums rise on logistical constraints at Santos port

Agriculture | Biofuels | Sugar | Coronavirus

Brazilian ethanol trading and pricing dynamics amid COVID-19

Shipping | Marine Fuels

Platts Bunkerworld

Commodities | Agriculture | Sugar

S&P Global Sugar and Ethanol Forum

Electricity | Electric Power

PG&E warns customers about potential power shutoffs due to hot, dry conditions

Brazilian sugar cash premiums rise on logistical constraints at Santos port

Highlights

Brazilian cash premiums up 4 points from June 15

Santos ship line-up shows 2.76 million mt to be loaded

Santos — The Brazilian cash premiums to ICE July NY11 sugar futures contract have risen by four points since June 15 due to logistical constraints related to export of a potentially high volume of raw sugar from Santos port, market sources said.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

Despite coronavirus pandemic's negative impact on the global sugar demand, Brazil is expected to export 10 million mt more sugar during Center-South 2020-21 crop year -- which started in April 2020 -- compared to the year-ago period. This is expected to exert strong pressure on its logistic capacity.

S&P Global Platts on June 18 assessed Brazilian raw sugar FOB Santos for July shipment at 16 points premium to the July (N) future contract, up 3 points on the day.

Previously, the assessment was unchanged on June 17 even though two trading houses were reported to have sold July shipment period FOB Santos cargoes at N plus 16 points. However, these trades were not validated by multiple sources and no bid was heard in the market.

On June 18, however, multiple market participants reported that there were three potential buyers for July shipment indicating bids at N plus 15 points, while the offer was at N plus 25 points.

According to market participants, the logistical issues related to the export of raw sugar from Santos port supported this upward movement in the Brazilian cash premium for the front month. "Traders were favoring to pay higher premiums to lower the demurrage cost," said an international sugar trader.

"The sugar shortage from traditional exporters such as Thailand, combined with a low flat price in the beginning of the CS [Center-South] crop and freight rates at near the lowest historical levels, encouraged the demand to anticipate the shipments," said Rodrigo Ostanello, head of sugar trading for ED&F Man Brazil.

Santos port has seen record-high numbers of ships lining up to load sugar since April, when the sugar season officially started in Center-South Brazil. The port might continue to see such record high line-ups in the next crop months.

According to UNIMAR Shipping Agency, 39 ships were waiting to load 1.95 million mt of raw sugar at Santos port, while 18 were expected to arrive between June 19 and July 3 to load another 816,000 mt. This added up to 2.76 million mt of sugar declared to be loaded.

The last ship scheduled to arrive in the line-up had an estimated time of arrival on July 3 and estimated time of departure on July 29, showing a 26 days of waiting time at Rumo terminal.

The front contract ICE July NY11 will expire on June 30 and market participants are estimating a new record volume of sugar to be delivered in Center-South Brazil, which will be shipped between July 1 and September 15. If this estimate is confirmed, the Brazilian infrastructure will need to surpass its efficiency and count on a good weather condition to guarantee the global sugar supply.

Brazilian sugar terminals cannot load during a rainy day as they do not have a roof to protect the soft commodity from exposure. Any operational day lost to rain can translate in a longer waiting time and stronger cash premium pressure.