Apr 15, 2010
Record Brazilian Soy Crop Continues To Cause Logistical Problems
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The large soybean crop in Brazil continues to cause logistical bottlenecks all around the country. Grain elevators are being forced to pile soybeans on the ground due to a lack of adequate storage space. Long lines of trucks are common at all the major ports of Brazil. Ships have been forced to wait up to three weeks to load soybeans at some of the major ports in Brazil. It's all a symptom of the lack of adequate infrastructure needed to store and move the ever-expanding grain production in Brazil.
The soybean production in the state of Parana increased so much in 2009-10 that many co-ops are being forced to pile soybeans on the ground while they await transportation to move the soybeans to processing facilities and exporters. Coopavel, one of the largest cooperatives in Brazil, announced that eight of their elevator sites were forced to pile soybeans on the ground due to a lack of storage space. The co-op tries to limit the amount of time the soybeans are stored outside to 45 days, but there are so many soybeans this year, some piles will be there longer than 45 days. Co-op officials said that every time it looks like rain they have to scurry out and try to cover the piles.
The situation in Parana is going to get worse once the safrinha corn harvest begins in several months. If additional storage space isn't available before the start of the corn harvest, there could be piles of both soybeans and corn at the same time.
In the port of Rio Grande, which is the major port for the state of Rio Grande do Sul, the lines of trucks waiting to unload have been increasing in recent days. At the peak of the export season, the port will load approximately 48,000 tons of soybeans per day and 70% of those soybeans arrive at the port via trucks. More than 1,000 trucks per day will arrive at the port carrying soybeans for export. On the main highways leading to the coast, more than half of the vehicle traffic is heavy trucks carrying soybeans. Additional parking lots adjacent to the port have been opened up to accommodate all the trucks waiting to unload.
Sixty percent of all the soybeans grown in Rio Grande do Sul will eventually be exported to China with Taiwan and Germany being other large customers as well.
The lack of infrastructure and the high cost of transportation has become a national issue in Brazil. Brazil has huge areas of land that could be brought into soybeans production, but the country is at a distinct disadvantage compared to Argentina and the United States due to its high cost of storing and moving the products to overseas customers. Brazil will have presidential elections in October and already the inadequate infrastructure has become a campaign issue.