A fire in Santos ravaged Copersucar's sugar terminal in Brazil, paralyzing operations of the world's biggest sugar trader and putting 10 million tons of export capacity offline for six months or more.
The fire hit all of Copersucar's warehouses at the Santos port, igniting 180,000 tons of sugar - roughly 10% of Brazil's monthly sugar exports, and driving prices of the sweetener to a one-year high on global markets.
The loss of nearly all of its port capacity will send Copersucar scrambling to lease or rent terminal space to cover its obligations to global buyers and exchanges in the coming months. Copersucar says nearly a fifth of the world's sugar exports flows through its trading desks.
”A conservative estimate would be six months to get this in operational form (again), said a US trader. The jewel in their crown has been effectively destroyed.”
Copersucar's rivals in Brazil will likely pick up some of the slack left by the fire and benefit from the extra export volume and improved sugar prices. The fire did not affect terminal operations at other exporters at Santos, such as Cosan SA, Sao Martinho SA or Noble.
The disaster adds one more bend to the tortuous path that Brazilian agricultural products must take to global markets. Potholed roads, scarce rail transport and backed up ports already undercut margins of Brazilian sugar and grain producers and cause headaches for global commodity markets.