Vessels head toward Russia with big sugar cargoes as store shelves empty (updated)

Novorossiysk Commercial Sea Port PAO

17/03/2022 17:28

(Adds pictures available, no other changes)
    By Marcelo Teixeira
    NEW YORK, March 17 (Reuters) - At least five vessels are
headed toward Russia with nearly 200,000 tonnes of Brazilian raw
sugar sold by European traders, according to shipping data seen
by Reuters, about double the country's normal annual imports of
the sweetener.
    Sanctions following Russia's invasion of Ukraine have
boosted demand for sugar and other food staples there, and store
shelves have been emptying due to food hoarding. Yet sanctions
may also make it harder for shippers to get paid for their
cargoes.
    The volume of sugar being shipped is unusually high, traders
said, noting Russia tends to import roughly 100,000 tonnes of
sugar per year. Russia is not a notable importer or exporter of
sugar, but Russians have started to hoard the sweetener.
 urn:newsml:reuters.com:*:nL5N2VK1RB
    While sugar sales are not covered by the sanctions,
financial transactions are. Also, analysts said security issues
in the Black Sea may hinder the vessels.
    Black Sea shipping routes have been tangled as the war has
shut ports in Ukraine and as companies refuse to buy some
commodities from Russia. A U.S.-based trader said the
Russia-bound ships are waiting in the Black Sea area for
clearance to move to the Novorossiysk port in Russia's Krasnodar
Krai area.
    In addition to the Russian shipments, there are also three
vessels with nearly 100,000 tonnes of sugar heading to Russia's
neighbor Georgia, according to port movement data provided by
shipping agencies in Brazil and information from sugar market
traders.
    Russia was expected to import only around 100,000 tonnes of
sugar in the whole year from all suppliers, not just Brazil,
according to data from the International Sugar Organization.
Georgia was expected to import 130,000 tonnes.
    "Well, all that sugar might land in Georgia, but then it
will be sent to Russia," said a U.S.-based sugar trader.
    Another sugar trader, based in Brazil, said the volumes are
too high for a short period of time, both for Russia and for
Georgia, saying buyers were probably looking to boost stocks. 
    Shipments to both Russia and Georgia were loaded on vessels
leaving Brazil, the world's largest sugar exporter, with three
European food traders and one Brazilian company behind the
deals: Sucden, Louis Dreyfus Co and Tereos in Europe, and Raizen
in Brazil. 
    Sucden is the largest player in those deals, with one vessel
heading to Georgia and four ships going to Russia with a total
amount of 188,250 tonnes of raw sugar. The company did not
respond to questions about safety and payment for the cargoes.
    Dreyfus said the vessel Pu Lan Hai, which left Brazil late
in February declaring Russia as its destination, will now leave
part of the load in Egypt and the remainder in Georgia. It
declined to comment further.
    Dreyfus, one of the world's largest commodities traders,
said on March 4 it was stopping operations in Russia due to the
conflict in Ukraine, which Moscow has called a "special
operation."  urn:newsml:reuters.com:*:nL2N2V72M3
    Tereos said it was reviewing the information before
releasing any official comment. Raizen did not reply a request
for comment.

 (Reporting by Marcelo Teixeira; additional reporting by Nigel
Hunt and Maytaal Angel in London; Editing by David Gregorio)
 ((marcelo.teixeira@tr.com; +1 332 220 8062; Reuters Messaging:
marcelo.teixeira.thomsonreuters.com@reuters.net - https://twitter.com/tx_marcelo))