Delays fuel sugar price lift
CANE growers in Bundaberg are set to reap a short-term benefit from a bottleneck delaying Brazil's sugar exports.
Brazil's problem is that the nation's ports have not been able to keep up with record output of sugar, with about 100 ships still in line to take on cargoes.
Internationally sugar prices have surged 22 per cent since mid-May as exporters across the world try to keep up with the demand for sugar.
Overseas experts have speculated sugar prices could rise by 30% this year because of the delays.
Brazil is the world's largest exporter of sugar, accounting for about 54% of the world's supply.
Bundaberg Canegrowers chairman Allan Dingle said anything that affected the international prices for sugar would have an affect on Bundaberg growers.
“It should be a positive for us, but how much of an affect it will have I don't know at this stage,” he said.
Mr Dingle said while some Bundaberg cane growers would have forward priced their output not all would have done so.
According to regulations they could only forward price 60% of their output for 2011.
But he said the bottleneck could affect Brazil's exports for some time.
“In terms of the backlog it will take them a long time to get rid of it,” he said.
“If there is a backlog they might have to stop cutting the cane because there's nowhere to store the sugar.”
Mr Dingle pointed out that it would not just be farmers who would be affected by the bottleneck, but also all the manufacturers who used sugar in their products.
Cane grower John Manera said he expected there would be a short-term spike in the price producers received for their crops.
“There might be something for us for a while, but nothing long term,” he said.
“Once the backlog in Brazil is cleared up it will be full steam ahead.”