Brazil truck freight rates soar as soybean harvest lags
By Ana Mano
SAO PAULO, March 5 (Reuters) - February truck freight rates touched a 2.5-year high on a key soybean route in Brazil's top grain state of Mato Grosso amid harvest delays, according to a report sent to Reuters on Friday by ESALQ, São Paulo University's college of agriculture.
On the route connecting the country's soy capital Sorriso to Rondonópolis, from where grains go by rail to the Santos port, truck freight rates hit 138.69 reais ($24.36) per tonne last month, the highest since July 2018 in the region.
Brazil had harvested 25% of its soybean area through Thursday of last week, the slowest pace in 10 years, according to agribusiness consultancy AgRural.
Mato Grosso soy is usually planted before other regions, but the delay in harvesting there means it is now competing with other grain producing regions for trucks to haul its oilseeds to market.
Freight values are thus expected to continue rising as harvesting progresses, ESALQ said.
"The main reason for the current situation was a smaller harvesting window in past months," ESALQ said.
Brazilian farmers still largely rely on trucks to move grains while limited waterway and rail infrastructure puts them at a disadvantage against United States competitors, Thiago Péra, ESALQ's research coordinator, said by telephone.
While Brazil's infrastructure is improving, in 2019 it still cost about $22 more to ship soy from Sorriso to Shanghai than to ship from Iowa to the same destination, the U.S. Department of Agriculture (USDA) said.
In a March 2 report, the USDA found Brazil's soy export frenzy last year rose transportation demand. Yet the cost of shipping a tonne of soybeans across 100 miles by truck fell to $5.49 last year from $7.19 in 2019, mainly driven by Brazil's currency depreciation and the paving of a key highway linking Mato Grosso to northern ports, the USDA said.
($1 = 5.6930 reais) (Reporting by Ana Mano; Editing by Aurora Ellis)
© Copyright Thomson Reuters 2021. Click For Restrictions - http://about.reuters.com/fulllegal.asp