SAO PAULO - A fire Friday destroyed some 180,000 tonnes of sugar at several warehouses in the southern Brazilian port of Santos before it was contained, authorities said.
Four warehouses with sugar burn in flames at the port of Santos, the biggest of Latin America, some 60 km of Sao Paulo, Brazil on Friday. (AFP photo)
Four people were injured in the blaze, which erupted in warehouses owned by Copersucar, the world's largest sugar trader, the Port of Santos said in a statement.
``The fire affected some 180,000 tons of raw sugar,'' said Copersucar in a statement.
``The causes of the incident are not yet known and are being investigated,'' the firm added, saying it had put in place contingency plans to minimise the impact.
``The fire has been brought under control,'' a port authority spokesman earlier told AFP.
Port officials said the fire broke out in the conveyor belt system that links Copersucar's six warehouses, which have a capacity to hold up to 100,000 tons of sugar each.
All six warehouses were damaged by the blaze and all Copersucar operations were at a standstill, port officials said, adding it was too early to assess the full extent of the damage.
After the fire was reported, sugar prices in the US$17.5 billion futures market spiked 6% and traded near one-year highs.
Sugar futures later pared gains and were recently up 2.5% at 19.47 cents a pound on ICE Futures US.
``The loss of the warehouse space in ports will make shipping much more difficult. So we saw a short-term spike in prices, but as the logistical issues get worked out, we will see this go away,'' said US-based Price Futures Group senior analyst Jack Scoville.
``It will hurt world availability for the short term, though, and probably help India and Thailand sell sugar at slightly better prices than they might have been able to do otherwise.''
Santos, Brazil's biggest port, accounts for more than 60% of the country's sugar exports and Copersucar is responsible for 25% of the sugar shipped through Santos.
From January to August, nearly 12.8 million tonnes of sugar transited through Santos, officials said.
Brazil is the world's leading producer of sugar and ethanol.
The sugarcane sector directly employs 1.2 million people out of a total population of more than 200 million.
The UNICA sugarcane and ethanol lobbying group, which represents 60% of the country's sugarcane producers and processors, forecast record sugarcane production in 2013-14, with an ever-growing share going to ethanol output.
It said the harvest in the main producing region in central-southern Brazil should total 587 million tonnes, up 10.18% from the previous one.