Homepage

Search on site

To write the letter

Site map

We are on:

Ukrainian Grain & Oilseed Market

Ukrainian Grain&Oilseed Market

Home > News

Cofco Said to Switch Brazil Port Terminal to Deliver ICE Sugar

11.07.2016 11:15 "Agro Perspectiva" (Kyiv) — Cofco Agri Ltd. is switching its terminal at Brazil’s biggest port to ship sugar instead of grains after the unit of China’s largest food company delivered sweetener against futures contracts in New York.

The company’s terminal at the port of Santos will turn to loading sugar this month as grain shipments will be diverted to other wharves, according to two people familiar with matter, who asked to not be identified because the information is private. Cofco Agri delivered about 795,000 metric tons of sugar when the July contract expired last week on the ICE Futures U. S. exchange. The switch to sugar loadings was due to start Monday, one person said.

Chinese demand for raw sugar has been slowing as high prices make it less profitable to process the sweetener at the country’s refineries and smuggling of the white variety increases through Myanmar. The nation imported 140,000 tons of sugar in May, more than 70 percent less than a year earlier and the smallest amount for that month since 2010, customs data showed.

«China importers are having negative margins at this moment,» Bruno Lima, head of sugar and ethanol at futures and options brokerage INTL FCStone Inc., said by phone from Campinas, Brazil. «Local refiners have been struggling with big volumes of sugar being smuggled from neighboring countries.»

Cofco Agri will be the biggest deliverer of sugar against July futures in New York, fueling speculation demand in Asia may not be as big as initially forecast. The company expects to ship about 1 million tons of sugar this year from its terminal in Santos, which had been mostly used to load corn, soybeans and oilseed meals, one person said.

«If China can be a potential sugar buyer throughout the year due to weather problems that have hit not only that nation but also India, Thailand and Brazil, why would a Chinese trader deliver against July,» Arnaldo Luiz Correa, a partner at Sao Paulo-based Archer Consulting, said in a report e-mailed Saturday. «Do they know something that the rest of us don’t?»

While Cofco Agri sold, Wilmar International Ltd., which has a large number of clients in importing countries, took delivery for a sixth time. The Singapore-based trader bought about 1 million tons of sugar. While some traders say that signals strong demand as a second year of shortages looms, others say the exchange was the preferred method of buying to avoid potential delivery problems that may arise from loading delays due to poor logistics in Brazil.

«The expiry shows divergent views on physical sugar,» James Kirkup, a broker at ABN Amro Clearing Bank in London, said by e-mail last week. «Cofco and Wilmar both have China as a strategic destination but they are opposite sides of the expiry.»

Cofco Agri’s move also reflects an expected slump in corn exports from Brazil this year as output of the grain has been severely reduced due to drought. Last year, the company exported almost 1.1 million tons of corn from its terminal.

http://www.bloomberg.com/europe

Agro Perspectiva

< UNICEF: El Niño's "devastating impact" on children

All news for
11.07.2016

Ukraine, Canada signed a Free Trade Agreement >

08.01.2025