* Copersucar buys 2,216 lots, or 112,578 tonnes, of sugar
* Rainy weather delays cane harvest, sugar production
* Seen as protective measure to cover supply commitments (Adds background on harvest troubles, ports situation, byline)
By Peter Murphy and Marcy Nicholson
BRASILIA/NEW YORK, July 2 (Reuters) - Copersucar S.A., a top sugar and ethanol producer in Brazil, said on Monday it was buying sugar, an exceptionally rare move that has not been seen in at least 50 years after rainy weather delayed harvest and shipping, according to industry sources.
Copersucar will take delivery of 2,216 lots, or 112,578 tonnes, of sugar against the ICE Futures U.S. July expiry on Friday, Copersucar spokesman Guilherme Pena said, declining to make any further comment.
“(This is the) first time that a producer has taken delivery,” in more than 50 years, said Michael McDougall, a senior vice president for Newedge USA.
“It’s a reflection of the situation in Brazil as far as the delay with the cane harvest and sugar production.”
Weather problems are dogging Brazil’s cane harvest with unseasonally heavy rain since the crop’s outset in April, delaying production and threatening to reduce total output of the sweetener, though a spell of drier weather has now begun.
Brazilian cane industry association Unica said last week that the delays would push the bulk of this season’s sugar production into the second half of the year. Its data put sugar production through mid-June at 28 percent less than last season. For details, see:
Julio Borges, director and associate at Job Economia told Reuters the purchases served as a protective measure by Copersucar to ensure its supply contracts would be met due to the uncertainty the weather problems created.
“I haven’t seen it before but the explanation is quite simple,” Borges said. “Since the harvest is delayed and the weather forecast is for more rain than is normal during the entire harvest period, it is possible that you may not crush the cane that is expected and the production would be less.”
Wet weather during the harvest brings a myriad of problems, preventing harvesters from operating in the fields, causing the plant to start metabolizing the sugar in the stalk thereby lowering the content and creating queues of ships at the ports.
The queue of ships at the country’s main ports handling sugar reached 70 during last week, not yet an alarming figure compared with a peak of more than 120 during a wet period in 2010. That queue and resulting long delays to deliveries coincided with a period of exceptionally strong immediate demand to push sugar futures to a 5-1/2-month high by August that year.
Forecaster Somar said the outlook in the main cane-growing areas in the southeast, was for mostly dry weather during the next fortnight, however the key sugar port of Santos was at risk of a brief spell of rain this weekend and heavier rains the following weekend with a dry spell in between.
“The interior should be drier. It’s more on the coast (that there is a likelihood of rain),” said meteorologist Flavia Matiolo. (Reporting By Marcy Nicholson in New York and Peter Murphy in Brasilia; Editing by Marguerita Choy)