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April 24, 2014

Exporting Grain in Containers an Emerging Trend in Brazil

An emerging trend in Brazilian grain exports has been the increasing use of containers to move out soybean and corn exports from Brazil. Containerized grain exports started a few years ago as a novelty, but it has grown to be more than just a niche market. It is estimated that Brazil will export 30,000 containers of grain in 2014 or the equivalent of approximately 14 grain vessels and the volume is expected to continue increasing.

Most of the grain containers will be exported through five ports in southern Brazil especially the Port of Paranagua. The Container Terminal at the Port of Paranagua exported 1,800 containers of grain in 2012. That increased to 10,850 in 2013 and it is expected to increase to 18,000 in 2014. Each container holds 27 tons of grain and 70% of the containers hold soybeans and 30% hold corn. Two to three percent of the grain exported out of the Port of Paranagua in 2014 will be via containers.

The biggest advantage of using containers is that exporters can contract for much smaller volumes as compared to a 50,000 ton grain vessel. These smaller volumes are ideal for manufactures in Asia that make tofu for example and only need a thousand tons of soybeans per month and don't have the storage capacity for more than that.

Containers are also an ideal way to insure that conventional soybeans (non-GMO) do not get contaminated with GMO soybeans, which represent more than three quarters of all of Brazil's soybean production.

The actual logistics of loading containers also has an advantage over bulk shipments. The container is filled at inland locations and brought to the port just prior to when the vessel will be loaded. It takes a day and a half to two days to load a vessel with grain containers and the wait time for the vessel to load is less than half of the waiting time for a bulk vessel. A grain vessel at the Port of Paranagua may have to wait two months to get loaded with 50,000 tons of soybeans. If a buyer is anxious for smaller quantities of soybeans, ordering it by containers can reduce the delivery time by more than a month.

Another advantage is that the process of loading containers can continue during wet weather, whereas bulk loading is suspended during periods of rainy weather. As a result, an importer can be more assured of when his soybeans will arrive by using containers.

By the end of 2014 there will be seven receiving locations in the interior of the state of Parana where the containers will be loaded and all the necessary grain inspections and documentation will travel with the container directly onto the vessel.

Approximately, half the containers arrive at Paranagua via train and the other half arrives by truck. Ironically, it takes twice as long to transport the container by train to the port than it does by truck.