March 29, 2012

Port of Santos Loses 110 Working Days per Year Due to Rainfall

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

The two largest grain ports in Brazil are the Port of Santos in the state of Sao Paulo and the Port of Paranagua in the state of Parana. Both ports are under-capacitated compared to the amount of soybeans, corn, sugar, and other commodities that are moved through the ports. In addition to not having enough berths, one of the biggest problems at both ports is that there are no covers for the ships so any time there is a threat of rainfall, loading operations are suspended and the holds of the ships are closed.

The threat of rain is particularly problematic when sugar is being loaded. Brazil is the world's leading sugar producer and sugar is exported from Brazil in both bulk and in sacks. Either way, even if there is a hint of rainfall, loading operations must be suspended.

At the Port of Santos, which is Brazil's principal port for exporting sugar, incredibly an average of 110 days per year (30%) are lost due to wet weather. Just eliminating the threat of rainfall and the capacity of the [port could be increased by nearly one third. Therefore, the port will begin in the near future the process of installing 21,000 square meters of covers over one third of the berths at the port. The cost of the covers is R$ 65 million and they are expected to be in place by the time the 2012/13 crops are being harvested. The project will primarily benefit the export of sugar and it is being paid for by Cosan, which is the world's largest sugar producer.

Officials at the Port of Paranagua have been discussing a similar project for more than a year. At the Port of Paranagua, the covers would cost R$ 60 million, but is uncertain if they will be installed in the near term or after the port has undergone a major modernization project.