Cosan Declares Force Majeure to Some Sugar Clients
Brazilian sugar exporter Cosan SA declared force majeure to some clients after a fire destroyed one of its 11 warehouses at the Port of Santos, a press representative said on Tuesday.
The measure was preventative while the company assesses the damage from the fire that firefighters controlled on Monday. Some orders could be delayed, the representative said. She declined to say how many clients were affected.
One of two terminals operated by Rumo Logística, Cosan's transportation unit, was unaffected by the fire and at least one berth at the second terminal, terminal 19 started operating on Monday.
Cosan is evaluating whether any of the 15,000 tonnes of sugar in Warehouse 10 could be saved and did not know when work to rebuild the warehouse could begin, the representative said.
The sugar market largely shrugged off the fire, with traders citing the limited damage and lack of urgent demand for Brazilian sugar. Damage was much less severe than a fire that hit the neighboring Copersucar terminal in October.
Copersucar is operating at half its 10 million tonne export capacity and expects to restore its full capacity in February.
Analysts said on Monday that Cosan could probably redirect the sugar that would have been stored at Warehouse 10, which has space for 18,000 tonnes, to other ports. Rumo's warehouses can hold 550,000 tonnes and export 12 million tonnes a year.
Brazil, the world's largest sugar exporter, is in the middle of the cane harvest in its main center-south growing region. Analysts expect the region to produce 32 million to 34 million tonnes sugar, slightly less than estimated earlier in the year due to an ongoing drought.
(Reporting by Caroline Stauffer; Editing by Nick Zieminski)