March 16, 2011

Heavy Rainfall Causes Problems at Port of Paranagua

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

Heavy weekend rains along the coast of Brazil have caused logistical problems at the Port of Paranagua, one of Brazil principal ports for grain exports. The deluge damaged two bridges on highway BR-277 that links the Port of Paranagua to the interior of Parana. The rains also interrupted rail service to the port as well. State officials feel that temporary repairs can be made to the bridges on BR-277 to allow for at a partially reopening of the highway to car traffic, but the timeframe for reopening the highway to truck traffic remains unclear.

Port officials are concerned about reopening the highway to truck traffic because that is the primary way that grain arrives at the port. Seventy percent of the grain arriving at the port does so via trucks and 30% via rail. Rail traffic is expected to resume sometime this week, but truck traffic on BR-277 is still being restricted.

The public warehouses at the port contain enough soybeans to load four vessels (approximately 250,000 tons) and loading is proceeding normally, at least for the time being. If the roadway cannot be reopened to track traffic in a timely fashion, the loading pace at the port may have to be slowed down at least temporally. On a daily basis, approximately 3,500 trucks arrive at the port carrying soybeans, corn, sugar, and wheat. Without trucks bringing in fresh supplies of grain to the port, the loading will only be able to proceed as fast as the grain can be brought into the port by rail.

The Port of Paranagua is also the main entry way for imported fertilizers coming into Brazil and if truck traffic on BR-277 remains restricted for an extended period of time, vessels bringing in fertilizers might also be delayed or diverted to other ports.

The interruption of truck traffic is coming after several weeks of problems at the port. Wet weather over the last two weeks has resulted in a very slow pace for loading vessels. During periods of dry weather, it normally takes approximately 36 hours to load a 60,000 ton vessel, but when there is rainfall, the loading operations must stop until the threat of rain passes. That was the case last week when it was taking up to five days to load a 60,000 ton vessel.

The main export season is just now starting in Brazil and already there are approximately 25 vessels waiting in the harbor for their turn to load grain. If the highway cannot be repaired in a timely fashion or if wet weather returns to the port, the lineup of vessels will quickly increase.