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June 12, 2014

Port of Santos Struggles while Paranagua Exports Record Soy

The Port of Santos is Brazil's major port handling a quarter of all of Brazil's export, but it has struggled this year due to a lack of dredging needed to keep the port operating efficiently. The second major port in Brazil is the Port of Paranagua and it has done much better this year recording record volumes of grain exports during the first five months of 2014.

The problem at the Port of Santos is a shallow draft in the channel and at the berths that is forcing some vessels to leave port with less than a full load or causing some vessels to wait until high tide to complete loading operations. According to studies conducted by Abiove (the Brazilian Vegetable Oil Producers Association), the shallow draft at the port and the resulting delays has reduced the efficiency of the port by 15%.

The federal government promised improved operations at Brazilian ports in 2007 by launching a program to improve the drafts at all of the Brazilian ports. Some dredging has been done at the Port of Santos, but the contract expired in 2013 before the work was completed. The goal was to maintain a draft of 15 meters in the channel and at the berths, but that goal was not achieved. As a result, in January of this year the maximum draft of the vessels using the port was reduced to 12.3 meters from 13.2 meters allowed last year.

Bids were submitted in April for renewed dredging operations at the port, but the government did not accept any of the bids. Another round of bids was supposed to be submitted on June 6th, but it has now been postponed until June 27th. Until the dredging operations are completed, the shallow draft will continue to be a headache for exporters using the port.

In contrast to the Port of Santos, the two ports in the state of Parana, Paranagua and Antonia, have recorded record volumes of exports thus far in 2014. During the first five months of 2014, the two ports exported 53% more soybeans than during the same period in 2013. In total, 5.3 million tons of soybeans were exported from January through the end of May compared to 3.5 million tons in 2013. Considering all grains, soybeans, corn, and soybean meal, exports have increased 7% at the ports compared to last year to 7.1 million tons.

The number of trucks arriving at the Port of Paranagua during the first five months of the year has also increased from 155,600 in 2013 to 176,000 in 2014. A new scheduling system for the trucks has avoided the long lines of trucks waiting to unload that were common in past years. Trucks are now only allowed to enter the port after they have been notified by the new computerized scheduling system.

The Port of Paranagua has also registered an increase of 8% in the movement of liquids into and out of the port including 105,500 tons of soybean oil (exported) and 207,000 tons of petroleum derivatives (imported and exported).