China Looks Elsewhere for Soybeans

Brazil's infrastructure woes are costing the country money

If there's ever a time to get a little help from the unions, Brazil needs it now.

Dock workers at Brazilian ports had stopped work briefly to protest the Brazilian government's efforts to privatize its ports. The idea is to modernize and upgrade the port system through private initiative, but port workers are concerned about losing their jobs and benefits in the process.

As if Brazil's ports weren't already the center of attention.

By now it's old news that the Chinese just canceled a two million-tonne order of soybeans from Brazil because the Brazilians just can't get the beans loaded quickly enough. Their infrastructure issues are costing money now.

While the Brazilians are hard at work on addressing the issue (see several past posts on this blog and the February cover story of Farm Futures), those improvements won't be ready for several years, at best.

Meanwhile, 100 ships were waiting to dock at the Port of Paranaguá, Brazil's second-largest soybean-exporting port, according to reports. And one group representing maritime shippers says its members alone have lost an estimated $57 million as a result of the lines of trucks and ships at the Port of Santos, near São Paulo.

And that's on top of what exporters, importers and the port itself are losing.

And then there's the rain at both ports, which, together, handle most of Brazil's total soy exports. While Paranaguá Port can load up to 80,000 tonnes of beans or corn per day when it's dry, the frequent rains slow things down so that, according to one expert quoted in the local press, ships that were taking two days to load are now taking three and a half days.

Down at the Paranaguá Port, meanwhile, there have been 27 days, six hours and 24 minutes of rain delays since the first of the year. They cannot load soybeans or corn in the rain.

Corn exports

Another factor slowing things down is the explosion in corn exports—up 288% at Paranaguá Port-- at the same time there is a big soybean crop coming. That usually doesn't happen, but this year—with a drought-affected U.S. corn crop—demand for Brazilian corn is greater. And when it costs $20,000 to $25,000 a day to sit at anchor at the port, those kinds of delays are killers.

There is a ray of sunlight, though—after a meeting with federal legislators, port workers recently agreed to cancel a planned work stoppage scheduled for Monday, March 25.

Too late to save the Chinese orders, but it's a start.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.