Rising break bulk rates and burgeoning container availability has led to an expectation that half of white sugar exports from Brazil this year will be containerised, Reuters reports.
A recent surge in Brazilian imports, driven by local economic growth and a strong currency against the dollar, has resulted in an increase in container availability. Aging break bulk ships carry 14,000 tons - that's 52 TEU at 27 tonnes per box.
"I think it is a definite shift. Carriers of bagged sugar are getting old, more expensive, insurance is difficult and freight rates for containers have declined," explained Carlos Franco, CEO of the local subsidiary of France-based Louis Dreyfus (LDC).
Shipping consultants Santos Associados said the US$77 per tonne rate for a break bulk carrier, up 120 per cent year on year, compares to $88 per tonne by container to Africa, but the difference is narrowing.
Sergio Wanderley, CEO at Brazilian trading house Coimex, predicts a surge in containerised commodities in coming years with the advantage of reaching a larger number of importers and smaller ports with lower volumes.
Brazil is one of the world's largest producers of sugar with 70 per cent of its raw sugar exports go to Africa and the Middle East.
Daily average imports in May and June were 49.2 and 81 per cent higher respectively in the same period next year.
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