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Brazil's Corn Output Delays Soybean Shipments

SAO PAULO, Brazil (Agriculture.com)--The production of Brazilian soy and corn grows every year. However, the logistics did not follow the advancement of production and marketing of grain is still considered a deficit. In previous seasons, Brazil was faced with queues of trucks and ships in ports, and this story is repeated in 2016.

"The queue is a reoccurring problem, especially at this time of the year. But I believe that the situation is more severe now because we're moving a lot of corn," said Aedson Pereira, an analyst at Informa Economics consultancy FNP, of São Paulo. According to the analyst, with the appreciation of the dollar against the real, corn became a product more competitive abroad and exports are still warm.

"Most people are finalizing corn exports in January or at the most in the first half of February. But, this year, we can close the month of February with a record of up to 4 million tons exported," said Pereira. "This continuous stream of corn sales can match the window of soy flow and cause queues at ports. The trading companies are accelerating exports of corn to make sure that doesn't happen. "

Ship lineups delay exports

According to Pereira, the acceptable waiting time would be of 20 to 30 days. However, some ships are waiting up to 60 days to dock. "The fact of having a waiting list of up to 60 days may cause the buyer to choose the grain of another supplier, such as Argentina and the U.S.,” he says. "In 2013, we had huge queues and we saw many contracts get cancelled. Queues and occasional delays always are expected, but we won't have the same scenario of 2013 this year."

According to data from the National Association of exporters of cereals, there were 113 bulk carriers off the coast of the Brazilian ports on February 15, 2016. Of this total, there were 26 ships awaiting berthing in the largest grain exporting port, the port of Santos, in the State of São Paulo in Brazil.

However, the largest line of soybean and corn ships was recorded in the port of Paranaguá, in Paraná, the second-largest port for handling these grains, with 50 ships waiting. The line is mainly caused by the rainy weather in the region, which caused delay in shipments.

The Public Relations Department of the port of Paranaguá reported that the actual queue at the port is 18 ships in line. The other ships do not have contracted cargo to board but are already waiting in the harbor because they will load soon.

"If you look at the vessels that are off-shore, Brazil really has more ships waiting this year than last year, however, it's not a real comparison. In a queue of ships waiting to load, some are not yet hired and, most often, even in the field was taken," said the port in response to Successful Farming Brazil.

The logistical advance in North

The Brazilian agribusiness is seeking new alternatives for the marketing of grain. One is the route that leads to the production of the Northern State of Mato Grosso, Bahia, Maranhão, Piauí and Tocantins to ports in the Northern region of Brazil. In this region, the grain terminal (Tegram) is located near the port of Itaqui (State of Maranhão), which began operating in March 2015, and was responsible for exports of 3.4 million tons of grains last year.

On October 15, the line at the port of Itaqui was only four ships. "The Tegram is one of the big bets to be able to vent the outdated logistic system of the country, still very concentrated in grain transport by trucks to the ports of Santos (SP), Paranaguá (PR), and Rio Grande (RS)," says Luiz Claudio Santos, director of logistics of the CGG Trading, the company responsible for the terminal.

According to Santos, the port of Itaqui (a strategic role for the sector), will increase its capacity to serve the market for soybeans and corn and alleviate the queues of ships in the Southeast and South. "Right now, these queues are natural. We're seeing a full line-up because the corn harvest was great, but we will see an accommodation soon. We have to finish corn exports to ship soybeans."

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Written by Darlene Santiago, Successful Farming sfagro.com.br Editor