- Sucden to send 30,000 tons of Brazilian raw sugar to Romania
- EU has a special quota for sugar from Brazil's northeast area
Surging European Union sugar prices are spurring imports from northeast Brazil under a system that allows supplies to enter at reduced rates.
Trader Sucres et Denrees SA booked a vessel to ship 30,000 metric tons from Brazil’s northeast port of Maceio to Romania, data from shipping agency Williams Brazil showed. The Daiwan Wisdom ship is the first seen on line-ups since speculation emerged about deals being struck to send sweetener to the bloc last month.
EU sugar prices have jumped more than 10 percent since the season started in October as the bloc’s harvest drops to the smallest in more than 40 years, said Stefan Uhlenbrock, an analyst at F.O. Licht GmbH in Ratzeburg, Germany. Prices in western Europe of 550 euros ($604) a ton are 43 percent higher than futures traded in London, according to Bloomberg calculations using F.O. Licht data.
“Prices in the European Union are rising more or less by the day," Uhlenbrock said by phone. “The quota is now attractive for Brazilian producers from the north, northeast region, so I would expect it to be filled by the end of the season."
The EU is importing sugar from northeast Brazil after failing to ship in any supplies last season, according to European Commission data. The bloc, which may be facing shortages of the sweetener this year, can import as much as 334,054 tons a year from the Brazilian region at a reduced duty.
Data from the commission, the bloc’s regulatory arm, showed in February no applications to bring in sweetener under the so-called CXL duty of 98 euros a ton, even though there had been speculation of traders buying sugar to ship to Europe.
Sugar output in the EU will drop to 13.6 million tons in the 2015-16 season ending in September, the lowest since 1971, F.O. Licht estimates. The commission needs to take action to boost supplies and avoid shortages, the Committee of European Sugar Users, a group representing more than 15,000 companies, said last month.
EU officials officials met with representatives from the sugar industry last week to discuss a possible supply crunch as imports may fall short of the bloc’s forecast, people who attended the meeting said. The region may bring in 150,000 tons less than it had expected, the commission told representatives, according to the people.
While filling import quotas at reduced duty would be an improvement from a year ago, shipments from nations with preferential access to the EU market are lagging behind last year’s pace “significantly” and not expected to change throughout the rest of the season, Uhlenbrock said.