UPDATE 1-COFCO to turn Santos port terminal from grains to sugar - statement

(Adds details of operation, context on sugar market)

By Roberto Samora and Marcelo Teixeira

SAO PAULO/NEW YORK, May 27 (Reuters) - Chinese commodities trader COFCO International said on Wednesday it will use its 12A terminal in Brazil's Santos port to move sugar instead of grains beginning in July and through the end of the year.

COFCO, which manages four sugar and ethanol facilities in Brazil, said the change was a result of higher sugar production in the country this year. In a statement, it said it plans to keep its Brazilian corn export program by using third party infrastructure.

Brazil is sharply ramping up sugar production this year, with some analysts expecting output to grow by as much as 10 million tonnes, as a result of falling prices and demand for ethanol.

Mills in Brazil, including those managed by COFCO, have flexibility to divert more or less cane into sugar production, depending on prices.

COFCO said its 12A terminal in Santos, Latin America's largest port, is currently being used to move soybeans. It would normally be used to move corn in the second half of the year, when Brazil's largest corn crop is harvested, but it will now be adjusted for sugar shipments.

The terminal has the capacity to move 400,000 tonnes of sugar per month.

The Chinese trader has sharply expanded operations in Brazil and across South America in recent years. It said it plans to turn the terminal back to grains in January to ship Brazil's new soybean crop.

China is by far Brazil's largest soy buyer, and it is also a main destination for Brazilian sugar, a business that is expected to increase following a reduction in Chinese sugar import taxes last week. (Reporting by Roberto Samora and Marcelo Teixeira Editing by Chizu Nomiyama and Tom Brown)

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