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Brazil struggles to export soybeans

03/06/2013 @ 7:10am

Strikes and a law limiting truck driving is undermining Brazil's ability to export soybeans at a time when the country is on track to become the world's largest producer of the crop, according to the U.S. Department of Agriculture attache in Brasilia.

In a report late Tuesday, the USDA country representative slightly lowered its estimate of 2012-13 output to 82.5 million metric tons, citing lack of rainfall in some regions of Bahia and Mato Grosso do Sul states during a critical stage when plants set their pods and then fill them out with beans. The lower output would still be enough to bump the U.S. from the top production spot.

But Brazil is having trouble cashing in on the crop. Strikes by port workers and logistical problems are diverting sales to the U.S. and other supplying nations halfway through harvest, a time when the country should have a competitive edge.

The USDA also said ship-loading wait times have reached 50 days at Parana, Brazil's second largest grain port, and warned delays could reach 60 days over the next few months. That's longer than usual this early in the season.

At the largest port of Santos, a couple of berths are not operating at full capacity with grain loaders under repair or replacement. As a result, many traders have stopped scheduling ship loading because they don't know when they will be able to dock.

Truck transportation costs have also increased by up to 50% on the year, due in part to a new law requiring truckers to take more frequent breaks but also because highways don't have enough rest stops.

The USDA said rain and high humidity damaged some beans that were harvested early in the season in the states of Mato Grosso and Parana.

Write to Michael Haddon at michael.haddon@dowjones.com or on Twitter @MichaelHaddonDJ

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(END) Dow Jones Newswires

March 06, 2013 06:10 ET (11:10 GMT)

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