Brazil – Distressed Sugar Cargoes from Santos

Members will already be aware of the fire at Copersucar Sugar Terminal in Santos a few months ago, as reported in the Club's News Alert of 24 October 2013 (click here).

The Club has recently received reports that cargoes of distressed sugar are being offered for carriage to a refining company in the Middle East. A significant proportion of the distressed sugar is reported to be very wet, due to the fire fighting measures. Usually sugar is listed in the IMSBC code as a Group C cargo based on the moisture content being 0% - 0.05%, however, it is possible that the moisture content of the distressed sugar, if affected by the firefighting measures, could exceed the moisture content levels specified in the IMSBC Code. Members should note that this changes the properties of the cargo from one with a low moisture content that is not ordinarily prone to liquefaction, to a cargo which may liquefy during a voyage. Liquefaction of cargo results in cargo shifting and loss of ship stability, a major cause of marine casualties. In the circumstances, Members should consider carefully the properties of any distressed sugar cargo being loaded in Santos and take appropriate steps to safeguard the ship where necessary.

Should a sugar cargo with a moisture content above expected levels prove to be safe to load, Members should take care to clause the bills of lading and mates receipts appropriately. Members should note that there have been reports that charterers/shippers are offering letters of indemnity in order to avoid the clausing bills of lading/mates receipts and that the Club recommends that such practices be avoided given the issues that may arise, including potential concerns over Club cover.

For further assistance and/or clarification in relation to the above, Members should approach their usual Club contact.