Sep 02, 2010
116 Ships Waiting to Load at the Brazilian Port of Santos
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
In years past, there have been many reports of lines of trucks up to 100 kilometers long waiting to unload grain at Brazilian ports. The horror story this year is the number of ships waiting to berth at the Port of Santos in the state of Sao Paulo. The port is the largest in Brazil handling both commodities and containers and at last count, there were 116 ships waiting in the harbor for their turn to berth and 40 of those ships were waiting to load sugar.
The Port of Santos is expected to export 21.5 million tons of sugar in 2010, which is 27% more than the 16.9 million tons of sugar exported through the port in 2009. The tremendous increase in sugar exports is one of the reasons for the backups both on the water and on land as well. The sugar arrives at the port primarily by truck in both sacks and bulk. Trucks carrying sugar to the port are waiting three times longer than normal to unload the sugar. Usually it takes three or four hours for the trucks to unload, but now the truckers are waiting 12 and sometimes 36 hours before they are allowed to unload.
The main reason for the delays in loading sugar appears to be the excess rains that have fallen in recent days. Sacks of sugar cannot get wet at all during the loading process, so even a light drizzle forces the ships to close their hatches until the threat of rain has passed. Other causes for the delays include: a tremendous increase in the amount of sugar moving through the port, a lack of adequate infrastructure needed to handle the increased volume, and a lack of planning on the part of the port operators. According to one analyst, it's a complete breakdown of the system.
The delays for the ship owners are much more costly than they are for the truckers. According to Jose Roque, president of the Syndicate of Shipping Companies at the port (Sindamar), it cost approximately US$ 20,000 for each day of delay for ships that carry sugar in sacks and up to US$ 90,000 per day for ships that carry sugar in bulk.
Brazilian sugar exports are up this year due to poor growing conditions in other principal sugar producing countries such as India, which has forced importers to look to Brazil for their needed supply of sugar. According to Paulino Moreira da Silva Vicente, director of infrastructure for the Sao Paulo Sugar Company, the Port of Santos can load sugar on 11 ships at a time and Santos is still the best port in the world to export sugar. He feels that the situation should improve in 15 to 20 days if there is no additional rainfall in the region.