Brazilian raw sugar shipments to the Black Sea region are steady and about normal for this time of year despite a slow start to Brazil's centre-south sugar cane harvest, physical and freight trade sources said on Tuesday.
They quoted a steady stream of freight orders from leading merchants accustomed to shipping sugar to Russia, to move Brazilian sugar to the Black Sea. The second quarter of the year is a peak period for Russian imports as stocks have fallen after the domestic beet harvest.
Traders said import margins into Russia had improved and freight rates remained high. The slow start to the Brazilian harvest, in part due to heavy rains, and mills' focus on producing ethanol biofuel in the early stage of harvesting, have driven up export premiums for raw sugar.
Traders quoted centre-south Brazilian very high polarisation raw sugar bid at around 37 points (0.37 cent per lb) over NYBOT July. Freight to carry sugar in bulk from south Brazil to the Black Sea was quoted little changed over the past two weeks at around $70 per tonne.
US raw sugar futures settled on Friday at a month high as trade and speculative buying sparked a market rally, possibly buoyed by firm Russian physical demand. The New York Board of Trade's key July raw sugar contract soared 0.49 cent or by nearly 5.5 percent to end at 9.42 cents per lb. "The move was fundamentally based on factors known a week or more before, slow Brazil supply, heavy Russian and other demand, but the charge was electrified with the chart break above 9 cents basis July," Fortis said in a daily market report.
Another brokerage report talked of the possibility of a future increase in Russia's sugar import duty from next January, which could trigger a jump in Russian imports in the fourth quarter, but there was no confirmation of any such move.
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