UPDATE 1-Brazil's Cosan says ALL not completing sugar shipments

Fri Jun 28, 2013 8:10pm EDT

(Updates with ALL response in fifth paragraph)

SAO PAULO, June 28 (Reuters) - Brazil's biggest sugar and ethanol producer, Cosan SA Industria e Comercio, said on Friday that logistics firm ALL America Latina Logistica SA was not completing sugar shipping contracts because it has prioritized grains shipments.

Brazil has largely relied on trucks to move a record soy and corn crop to its ports and has been criticized abroad for slow shipments. The world's top sugar producer started its cane harvest last month and sugar exports are picking up.

"Our business is focused on railways, and now we're having to use trucks," Julio Fontana, Cosan's head of infrastructure, told Reuters on the sidelines of Brazil's Ethanol Conference.

He said ALL had focused on grains shipments last season to the detriment of sugar and the trend has intensified this year.

ALL responded that it gives no priority to one kind of cargo over another. But the company acknowledged in a press statement that it had not been able to transport everything it committed to under contracts, due to delays in the expansion of rail lines and port capacity.

Brazil exported a record 7.9 million tonnes of soybeans in May, though shipments have since slowed as ports make way for sugar and a second corn crop that is now being harvested.

Brazil's main trucking union has called a national strike for 72 hours starting Monday.

Argentina revoked two train concessions owned by ALL earlier this month, accusing it of missing investment targets. (Reporting by Fabiola Gomes; Writing by Caroline Stauffer; Editing by Bernard Orr and Lisa Shumaker)

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