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Frequently Asked Questions for Brazilian Sugar Buyers

About 20  years ago all buyers had to go through the central sales office in Brazil, usually by their's or their representative’s physical presence. Back then it would take you a lot of time to complete a purchase but there were almost no scams, no room for time wasting agents.

After VHP was introduced in the market, mainly because of the innovative work of Cosan, and due to the expansion of internet based business, every body now is potentially able to buy sugar from Brazil. Yet this is no worries free. Lots and lots of people abuse our market. Scammers and time wasters they are called, jokers or cheats who will present them selves like “real” sellers or buyers and will steal your time and perhaps your money.

What should I be ware off when buying sugar from Brazil?

Never go for the lowest price! When a commodity traded for 600+ USD per MT on the ICE Futures (F.O.B. price) is offered to you for 500 USD per MT at C.I.F. basis "to any safe port" it’s a scam.

Never pay advance money for bulk sugar! Use internationally accepted bank instruments and always ask for Proof of Product (if the sugar is in the port warehouse and it is already inspected) or Proof of Production Capability and the Allocation Title if dealing with a reseller.

If you are not experienced in the market seek advice from your legal representative for the procedure and the contracts.

Watch out for them greedy “agents” who will baffle you with nonsense and never ending emailing and document exchanging not ever getting you the sugar.

I want to buy large quantities of refined sugar, who can supply me?

Brazil is the world’s largest exporter of cane sugar. 2021/2022 Brazil’s sugar production was just over 35 million metric tons. Most of this sugar is sold as bulk VHP. This is raw cane sugar with sucrose content of 99.4% or higher. It is designed for easy refining at ICUMSA 45 RBU in the destination country. It is highly unlikely for a new buyer to obtain multiple million tons of refined sugar. There is just not enough, not much more than 4 to 5% of the total production. Offers for large amounts of Brazilian sugar refined to ICUMSA 45 RBU should therefore be viewed with many suspicions. A fairly larger amount of white CRYSTAL sugar at ICUMSA 100 – 150 RBU might be easier available.

The wrong idea about Proof Of Product (POP) 

Unless you are buying warehoused and already inspected sugar there is no meaning in asking your seller for POP before you make your financial commitment. That is because your sugar is most likely not yet produced.

 

POP documents for a CIF delivery generally consist of the following:

  1. 3/3 Sets of Bill Of Lading, 'Clean On Board' and marked 'Freight Prepaid' (3 Original Entry Copies) showing shipper as XXXXX

  2. Certificate of Weight, Quantity and Quality issued by SGS or equivalent authority.

  3. Certificate Of Origin and Phytosanitary certificate issued by the authorities in Brazil.

  4. Seller’s signed Commercial Invoice in 3 copies.

 

These documents are issued only after the sugar has been transported from the mill to the port warehouse, it is surveyed and about to get loaded to the contracted vessel for the contracted destination. It is physically impossible to acquire them any time before.

 

Excluding the very rear cases of a CAD or an HSS deal beeing offered, for the first time buyer any real seller will ask for financial securities before going into production but he will need to be able to provide before buyer’s financial commitment proof of the seller’s production (or delivery if the seller is not a producer) capability.

 

POP/C (Proof of Production Capability) documents generally consist of the following:

  1. COPY OF REFINERY & SELLER FEDERAL GOVERNMENT BUSINESS LICENSE.

  2. COPY OF REFINERY MUNICIPAL BUSINESS LICENSE.

  3. COPY OF PRIOR QUANTITY & QUALITY CONTROL REPORT.

  4. COPY OF ALLOCATION ASSIGNMENT OF THE CONTRACTED QUANTITY OF PRODUCT TO THE BUYER. (i.e. ALLOCATION TITLE)

 

All of these POP/C documents need to be good for verification in your embassy and with the local authorities in Brazil.

 

In all cases it is highly advisable that you or your representative visit with the mill/refinery in Brazil and acquire the services of a local law firm to perform due diligence on your seller, before any money or bank instrument changes hands. 

Do I need a LOI to get an offer?

NO you don’t. That would be time wasting. You can get a price quote simply by using our form here.

You can get our Soft Corporate Offer right away if you provide us with adequate business details.   

When and why do I need to provide a RWA or a Bank Confirmation
Letter?

If you are a first time buyer with us, AFTER we agree on price and terms you will need to start the buying procedure. We will then need to verify you have the intention and the funds to buy. For this purpose it is required depending on the nature of the deal either a RWA to be send to the sugar producer's bank, or a Bank Confirmation Letter to be send to us for verification.

Can I see the sugar before confirming my payment instrument? 

YES you can, if we have it in the warehouse. In most contract cases though, the sugar might have not yet been produced. You or your representative can then visit our refinery. However, SGS will in any case inspect the goods before shipping.

When do I pay?

No Brazilian mill / producer or seller will sell you sugar before you pay, yet every seller in Brazil has his own policy on payment options.  

Most of the real vendors in Brazil require a Bank Guarantee or a Stand By Letter of Credit to consider a bulk sale. Container shipments are usually paid upfront at a percentage.

Besides the payment guarantee instrument, everyone requires payment via a suitable bank instrument upon loading the sugar and against the shipping documents.

If you are looking to buy sugar and you want to pay at any time other than loading day please look somewhere else.

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