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February 18, 2020

Freight Rates Increasing in Brazil as Soybean Harvest Accelerates

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

As the 2019/20 Brazilian soybean harvest approaches 30% complete, the cost of freight to transport those soybeans is starting to increase. The freight costs are usually the highest during the peak of the soybean harvest. The current freight rates are not as high as last year at this time because the peak of the harvest last year was in February and the peak of the soybean harvest this year is not expected until March.

Freight rates started to increase in Mato Grosso during the last week of January and they are expected to continue increase on a weekly basis. Currently, the cost of transporting soybeans from Sorriso in central Mato Grosso to the Port of Paranagua is R$ 280.00 per ton (approximately $1.85 per bushel). The cost of transporting soybeans from Sorriso to the Port of Santos is R$ 300 per ton (approximately $1.95 per bushel).

Mato Grosso has some of the highest freight rates in Brazil due to the distance from the ports. The distance from central Mato Grosso to the Ports of Santos or Paranagua is approximately 2,000 kilometers.

In the state of Parana, the freight rates are much lower due to the proximity of the Port of Paranagua, which is in the state of Parana. In western Parana, the freight rates have increased significantly over the past 30 days, but they are still much lower than in Mato Grosso. The current freight rate to transport soybeans from western Parana to the Port of Paranagua is R$ 120.00 to R$ 130.00 per ton (approximately $0.80 to $0.85 per bushel). Several months ago, the cost was R$ 60.00 to R$ 70.00 per ton (approximately $0.40 to $0.45 per bushel).

Additionally, the Brazilian Supreme Court was set to decide on February 19th the constitutionally of the mandatory freight rates in Brazil, but that decision has been delayed and a hearing on the topic has been scheduled for March 10th.