Harvesting in the main centre-south cane-growing region of Brazil, the world's top producer and exporter, is proceeding rapidly in favourable weather, and dealers said the flow of ships to Brazil to load sugar had picked up.
"The South Brazil vessel line-up continues to grow," said Jonathan Kingsman, managing director of Lausanne-based sugar and ethanol consultancy Kingsman SA.
"If it carries on at this rate, you may soon be able to walk all the way from Brazil to Europe just by jumping from one ship to another."
In Santos port in Brazil, the line-up has now reached more than 1.9 million tons of bulk sugar, a European broker said in a report.
The centre-south of Brazil could export as much as 2.5 million tonnes of raw sugar per month, but most people are pencilling in 2.1 million tonnes per month for the July/September period, the broker added.
Demand for Brazilian white sugar before the Moslem holy month of Ramadan is also brisk, a typical seasonal pattern, dealers said. The period runs for 30 days from Aug. 11.
The broker said centre-south Brazil can export 600,000 tons of refined sugar a month, including containers.
Container rates have risen due to a lack of available capacity.
"All this means that Brazilian export logistics are being tested to breaking point," the broker said.
Dealers said the resurgent demand for Brazilian sugar before the start of domestic harvests in the northern hemisphere has been a major trigger behind the latest rally in sugar futures.
But they said that, while nearby supplies were tight, the longer-term picture was more bearish due to the weight of new crop Brazilian supplies coming through the pipeline.
"The general sentiment around the market seems to be that once (ICE) July (raw sugar) is expired (June 30) and the technical tightness is history, the market will have to carry the burden of a massive Brazilian crop and becomes a bear/sell rally play," wrote Thomas Kujawa in a daily report for broker Sucden Financial Sugar.
