March 28, 2013

2013 Brazilian Soybean Exports Starting Slower than in 2012

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

With a record large soybean crop to export from Brazil, the initial start to the export season is actually getting off to a slower start in 2013 compared to last year. There has been a lot written recently about long lines of trucks waiting to unload at the ports and long lines of vessels waiting to load, but the biggest problem seems to be wet weather in southern Brazil that has disrupted loadings at the Ports of Paranagua and Santos.

There are no provisions at the ports to cover the holds of the ships during periods of rainy weather, therefore loading operations must be suspended any time there is a treat of rain. Since the first of the year, loading operations at the Port of Paranagua have been suspended for wet weather for approximately one third of the days.

According to Exterior Commerce Secretary (Secex), during the first 16 days of March, Brazil averaged 174,800 tons of soybean exported per day which is 9.2% less than the 192,600 tons per day Brazil averaged during the same period last year. In February, Brazil averaged 53,000 tons of soybean exported per day and in January it was 9,000 tons per day.

The congestion is occurring not only at the ports, it is also happening at the major rail terminal in Mato Grosso. The lines of trucks waiting to unload at the Ferronorte Rail terminal at Alto Araguaia reached 100 kilometers this week. The terminal is operated by America Latina Logistica and they have been unable to accommodate the thousands of trucks wanting to unload soybeans. They can unload 1,200 trucks per day, but there were approximately 3,000 trucks parked along highway BR-364 leading to the terminal. The Ferronorte Railroad is the major supplier of soybeans by rail to the Port of Santos.

There have been extremely long lines of trucks at this rail terminal for over two weeks as grain companies attempt to transport a record large soybean crop to export facilities. Drivers are complaining that there are no accommodations for bathrooms, food, or even water for the two or three days they must wait to enter the terminal. The state highway police have been on the scene for the last two weeks trying to direct traffic around the lines of trucks.

In addition to a record large soybean crop, part of the reason for the long lines may also be the new truck driver law in Brazil that stipulates mandatory rest periods for the drivers. Independent drivers have shunned long hauls such as from Mato Grosso to the ports in southern Brazil due to the new regulations and they prefer short hauls such as to the rail terminal instead. They maintain that they lose money on the long hauls due to the mandatory rest periods.