Brazil’s delays loading soybeans for export may worsen in 2014 due to a bigger crop and as some grain facilities are used for sugar shipments, crop analyst Soybean & Corn Advisor Inc. said.
Waiting times for vessels may give U.S. soybean exporters a longer selling window and potentially lift U.S. export volumes, Michael Cordonnier, president and owner of the Hinsdale, Illinois-based firm, wrote in an online report today.
Brazil is forecast to harvest a record 88 million metric tons of soybeans in 2013-14, the U.S. Department of Agriculture forecasts. A fire at the port of Santos on Oct. 18 that destroyed sugar warehouses may mean some grain facilities will be used for exports of the sweetener, Cordonnier wrote.
“A good analogy for the infrastructure problems in Brazil is an hour glass,” Cordonnier said. “In 2014, the top of the hour glass is going to get bigger with a record large soybeans crop and the restricted part of the hour glass, which are the ports in Brazil, is going to get a little smaller in 2014 due to the fire at Santos.”
Brazil may export 1 million tons of soybeans by the end of February after early planting was delayed by a week, and the “real logistical problems” will start in March as the record crop starts heading to the ports, according to Cordonnier.
“The real choke-point in Brazil’s infrastructure is the capacity to load grain at the ports,” the analyst wrote.
Shipping problems and delays are “inevitable” because all of Brazil’s ports were already working at capacity, and the fire means a significant part of capacity at the port of Santos will be out of order for many months, the analyst said.
“The result could be longer waiting times for vessels and more congestion all throughout the system all the way back to the local grain elevators in the interior,” Cordonnier wrote. “If a vessel is forced to wait 60, 70, 80 days to load soybeans from Brazil, it could end up being cheaper getting the soybeans from the U.S. even if the price of the commodity is a little higher.”