Sugar prices rose early on Friday, then fell towards noon as Paranagua, Brazil’s second-largest port, was temporarily closed due to confusion about an environmental license. The environmental agency Ibama shut down the port for operation without the license, but a federal judge ordered it to reopen and gave it 30 days to show plans to acquire one.
Raw sugar on ICE Futures in New York gained 1.6 percent to 17.36 cents per pound, but by 11:45 a.m. EST the price fell to 16.85 cents per pound.
“This was excessive on Ibama’s part. There was no need to halt everything,” Andre Cansian, the port’s technical director, said to Reuters.
The unexpected ban and quick reversal highlighted the arbitrary and unpredictable nature of Brazilian bureaucracy, a major problem in one of the world’s biggest commodity exporters.
Brazilian ports often have a huge backlog of ships waiting to reach into port, to such a degree that Jonathon Kingsman of the Kingsman consultancy said “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.”
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