SAO PAULO, Oct 21 (Reuters) - Brazilian cane mills are adjusting the way they produce and store sugar to make it less flammable, industry executives said, after four major warehouse fires over the past year did millions of dollars of damage at the world’s largest exporter.
A severe drought that has damaged this year’s cane crop contributed to the rash of burned sugar, but it is only part of the problem, executives at the annual Datagro sugar and ethanol conference in Sao Paulo said Tuesday.
“The quality of raw sugar in Brazil has improved over the years, and this means it has lower moisture levels and creates more dust,” Copersucar Chairman Luis Roberto Poggetti said. “Combined with the hot, dry weather, it’s a dangerous mix.”
Poggetti said mills were exploring measures including altering the production process for bulk raw sugar, sometimes referred to as VHP for very high polarized sugar, so that it has higher moisture content or bigger crystals to reduce ambient dust levels.
Copersucar, Brazil’s biggest sugar and ethanol trader, lost most of its 10-million-tonne export terminal in Santos Port to fire in October 2013, sending sugar futures prices soaring over concerns about supply.
That same month, a sugar warehouse of local company Agrovia in the interior of the center-south cane belt went up in smoke.
As the worst drought on record in southeastern Brazil dragged into South America’s spring, two more warehouses at Santos port burned down.
One in August belonged to local sugar producer Cosan . Most recently, a warehouse jointly owned by U.S.-based Cargill Inc and Biosev, the local sugar and ethanol unit of France’s Louis Dreyfus , burned on Monday.
Investigations by police, fire departments and port officials are ongoing and have not pinpointed any single cause for the flames.
Poggetti said all of the alterations to the sugar could be done within the specifications of existing contracts, adding that neither the trader’s associated mills nor Copersucar were spraying sugar in warehouses with water, which could reduce the cause a degradation in quality.
Analysts have suggested that mills and warehouses had started to spray water as they try to reduce the risks of further losses to an industry that has been battered by low prices for sugar and ethanol recently.
Antonio de Padua Rodrigues, director at Brazilian sugar and ethanol industry association Unica, said some mills had no other option than to raise humidity levels in the warehouse to bring down dust levels.
He said mills were not literally spraying water on the sugar but rather were misting the surrounding air in the warehouse or structure. (Reporting by Reese Ewing; Editing by Caroline Stauffer and Lisa Von Ahn)