The queue of ships to load sugar in world top producer Brazil shortened for the fourth week in a row, an analyst and shipping agency said this week, after a recent price spike kept buyers at bay. The number of vessels loading or scheduled to load fell to 54 from 56 last week. That was well down from the peak so far this season of 86 ships one month ago, according to shipping agency SA Commodities/Unimar.
"Exports depend more on the price than external depend. External demand exists but at the moment clients are shying away, which is understandable," said executive director of analysts Job Economia, Julio Maria Borges. On July 22, New York raw sugar futures hit a five month high of 31.44 cents compared with just under 28 cents now. This time a year ago, ships steamed to Brazil to load sugar when demand surged after world top consumer India turned to imports to supplement domestic supplies among other factors. Though sugar export volumes in July, both raw and refined, neared the all-time record, reaching 3.06 million tonnes, dry weather has enabled ports to bulk-load round-the-clock and avoid long queues that at one point passed 120 ships in 2010.
July's faster shipments may have also reflected some pent-up demand after importers were kept waiting longer than expected for sugar at the outset of the season due to rain that slowed harvesting until as late as mid-April. Nicolle de Castro, commercial assistant at SA Commodities/Unimar said the agency expected sugar shipments would slow in August and September from July's levels, despite expectations until this week that exports would quicken.
Some of the agency's clients cited high prices on the domestic market, the strong Brazilian currency which recently hit a 12-year high and improved Asian harvests this year as limiting importer demand. "All these factors are reducing the outlook for exports for August and September," she said. "We were expecting a rise in September but it won't happen," she said, adding that India's return to the export market also gave buyers more options. The University of Sao Paulo's agricultural research unit Cepea, has calculated that domestic prices were eight percent higher than those paid on the export market by last week.