UPDATE 4-Brazil's No. 2 port closure ends, shippers puzzled

* Shippers surprised, unnerved by sudden port shutdown

* Port has 30 days to show plans to get environment license

* Sugar market already nervous over Brazil port bottlenecks (Recasts with shippers concerns)

By Peter Murphy

BRASILIA, July 9 (Reuters) - Shipping operators at Brazil's No. 2 port sought answers on Friday as to how the docks came to be shut down without warning for eight hours by environmental inspectors, delaying grains and sugar shipments.

The Paranagua seaport, which is situated centrally between the main sugar cane state Sao Paulo and grain-growing regions further south, reopened early on Friday after being shut down by the environmental agency Ibama for operating without a license.

Ibama ordered the port to close on Thursday evening and fined it 4.8 million reais (US$2.7 million) for lacking the environmental license, but a federal judge overruled the order in the early hours of Friday which enabled the facility to operate normally.

Commodities exporters at the terminal said they were taken by surprise and were mulling whether they needed to create contingency plans in case the port was closed again.

"Financially there weren't big losses but the worry is that this could happen again for a longer period of time and generate incalculable losses," said Luciano Denardi, director of Grano Logistica, which ships around 800,000 tonnes of soy, corn and flour from the terminal each year.

He and other operators were meeting with some of the port's management on Friday afternoon, seeking answers about the closure which could quickly have generated massive costs if ships fell far behind their scheduled itineraries.

The severity of the measure raised questions about regulatory risks in one of the world's biggest commodities producers. Business leaders have long complained that excessive red tape in obtaining environmental licenses was an obstacle to economic growth in Brazil.

"This was excessive on Ibama's part. There was no need to halt everything," Andre Cansian, the port's technical director, told Reuters. "We had soy and sugar loading yesterday. During this time they couldn't load."

The port estimated it could have lost around $50 million a day if it had been halted for longer. It handles about $12 billion in merchandise a year.

Cansian said the port did not have any major environmental problems that would prevent it from obtaining a license.

The sugar market strengthened on the initial news of a possible supply disruption from the world's top exporter, adding to existing concerns about growing delays for loading, with waits of up to three weeks. [ID:nLDE6650YR]

New York sugar futures closed lower but took early support from the uncertainty. In London, Liffe August white sugar futures LSUc1 closed up 70 cents at $606.50 after hitting a four-month high of $623.50.

RED TAPE, CORDONS

Ibama said the port had failed to meet deadlines for presenting documents needed to obtain the environmental license. It cordoned off equipment, preventing its use.

The federal judge that overturned Ibama's order, Marcos Josegrei da Silva, set a 30-day deadline to present a timetable for steps needed to obtain its license. Port technical director Cansian said it was ready and would be delivered on Monday.

Ibama also fined the country's largest port, Santos in Sao Paulo state, and ordered it to close on Wednesday. But the fine was revoked within hours and the shutdown order was ignored.

Ibama said in a statement that order was the "isolated initiative" of three inspectors who had not consulted Ibama's headquarters, though the decision regarding Paranagua was officially endorsed.

The inspectors' move was an audacious one, not only for the lack of official approval but given the vastness of the docks, the largest in the Latin American continent. Brazil's export earnings contribute about 15 percent of its fast-growing GDP.

This is a busy time of year for the port, which handles about 30 million tonnes of cargo a year, as much of the now-finished soy harvest is exported and as the world's top sugar exporter nears the peak of the annual sugarcane harvest.

According to port statistics, Paranagua shipped nearly 4.8 million tonnes of soy in 2009 -- roughly 8 percent of the national crop -- and 3.7 million tonnes of sugar -- 13 percent of total production. Brazil is the world's top exporter of both commodities.

Major trading houses such as Cargill [CARG.UL] and ADM (ADM.N) ADM have operations that use the publicly-owned part of the port affected by the closure. Private terminals were not affected by Ibama's measure, the port said. (Editing by Raymond Colitt, John Picinich and Jim Marshall)