May 31, 2018

It may take 7-10 Days for Brazilian Ports to return to Normal

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Even though leaders of the truck driver strike in Brazil accepted the concessions offered by the government and agreed to call off the strike, not all the drivers have agreed. As a result, the unwinding of the nationwide strike has been a slow process. As a result, some exporters in Brazil are contemplating declaring "force majeure" because they cannot fulfill their commitments for grain or soybean meal exports.

Loading activities at the Port of Santos have not returned to normal. Many drivers say they will maintain their work stoppage until they are guaranteed that the government will follow through on their commitment to lower diesel prices. Fresh soybean supplies continued to arrive by rail at the Port of Santos during the strike because the only railroad operating out of Mato Grosso has its terminus at the Port of Santos, so soybeans that were in transit at the start of the strike continued to arrive.

At the Port of Paranagua, the strike impacted various operations at the port. Port authorities indicated that 643,000 tons of products were not moved due to the strike. Five vessels of soybean meal and one vessel of soybeans totaling 280,000 tons were not loaded due to the strike.

The National Association of Grain Exporters (Anec) indicated that the Port of Paranagua had not received any new soybean deliveries since the start of the strike on Monday May 21st. As a result of the low stocks of soybeans, the Port of Paranagua is not exporting 400,000 tons of soybeans per day. Once new supplies of soybeans resume, it may take 7-10 days before vessel loading could return to normal levels.

According to the Brazilian Association of Vegetable Oil Industries (Abiove), all 63 industries that process vegetable oils had suspended their operations, but they are expected to resume operations very soon. All the biodiesel production facilities had also suspended operations because they had reached their maximum storage capacity and the could not move any of their products