SAO PAULO/NEW YORK: High transoceanic freight prices caused sugar consumers around the world to pause their buying and use stocks, leading to a temporary glut of the sweetener in the main export port of Santos, Brazil, that drove down price differentials.

According to BP Bunge Bioenergia, the sugar and ethanol venture owned by BP Plc and Bunge Ltd, Brazilian sugar was sold at times at a discount to New York raw sugar futures in July, instead of the conventional premium over futures, as many sugar importers left the market.

“The fact is that this situation with transoceanic freight caused some stress,” said Geovani Consul, BP Bunge’s Chief Executive. “It is coming back now, it is improving for August,” he added.

High transoceanic transport rates, both for bulk carriers that transport sugar and grains and for containers used for products such as coffee and cotton have increased costs for companies and hurt trade.

Analysts say a surge in online buying and imbalances in the distribution of containers and vessels during the pandemic, as well as higher oil prices, are the main causes. Prices for containers are triple what they were before the pandemic, while rates for Panamax bulkers touched an 11-year high early in July.