Fire hits major Brazil sugar export terminal

(Adds more details)

By Reese Ewing

SAO PAULO, Aug 3 (Reuters) - Firemen at Brazil's Santos Port struggled on Sunday to contain a blaze at two sugar warehouses, operated by producer Cosan SA, which threatens to disrupt exports from the world's biggest sugar producing nation.

The fire broke out at the sugar terminal at 4:30 pm local time and 12 fire trucks were still trying to bring it under control early into Monday morning, Sargent Rodrigues of the Santos Fire Department told Reuters.

Rodrigues gave no additional details.

Representatives for Cosan (NYSE: CZZ - news) , Brazil's biggest sugar producer, where not immediately available for comment.

Last October fire gutted the Santos export terminal of Brazil's largest sugar trader Copersucar, quickly sending futures prices up 6 percent and the trader issuing force majeure to its clients.

There was no sign that the latest fire had spread beyond the warehouses controlled by Rumo, Cosan's logistic unit at the port. Copersucar's terminal, which is still under repair from the October fire, is right next door to Rumo.

Loss of the physical commodity stored in Rumo's warehouses, which can hold 550,000 tonnes of sugar, is likely to be of less concern than the potential damage to the terminal's capacity to export 12 million tonnes a year of sugar.

The fire will likely disrupt short-term loading of sugar into ships at the Rumo terminal, and the risk of its spreading to other sugar warehouses connected by overhead or underground conveyor belts cannot be dismissed.

The Santos newspaper A Tribuna's website said firefighters were trying to contain the fire at Rumo's warehouses 5 and 10. Photographs of the fire in the local media showed large, thick columns of black and grey smoke rising from the terminal.

When large stockpiles of sugar catch fire, they can be difficult to extinguish quickly. As the sweetener burns into the center of the mound it creates a carbonized outer shell that inhibits the penetration of water and chemicals that would otherwise snuff out the blaze.

Brazil, the world's largest producer and exporter of sugar, is in the middle of its main center-south cane harvest that is expected to produce 32 million to 34 million tonnes of sugar, slightly less than initially estimated earlier in the year due to the impact of an ongoing drought. (Reporting by Reese Ewing; Editing by Michael Perry)