Jan 29, 2015

Brazilian Ports Increase Capacity to Accommodate Larger Soy Crop

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

In 2014, the Port of Paranagua lost its ranking as Brazil's second largest exporter of soybeans to the Port of Rio Grande at the southern tip of Brazil. Officials at the Port of Paranagua feel that the investments they have made over the last three years will once again propel the port back to the second most imported exporter of soybeans in 2015 behind the leading Port of Santos.

The Port of Rio Grande exported 8.2 million tons of soybeans in 2014, narrowly surpassing the Port of Paranagua which exported 7.5 million tons of soybeans in 2014.

Conab is estimating that Brazil will export 49.64 million tons of soybeans in 2015 surpassing the old record of 46.69 million tons set in 2014.

Since 2011, the Port of Paranagua has invested R$480 million in improvements with the biggest new investment being the replacement of four of the six shiploaders at the three berths which comprise the Export Corridor. Each new shiploader has a 30% greater capacity that the ones being replaced. One of the new shiploaders is already operational and a second will be ready in February. The two other new shiploaders will be ready for use in June. The port expects to move 26 million tons in total grain shipments in 2015 including soybeans, soybean meal, corn, and wheat compared to 21million tons in 2014.

For soybeans alone, the Port of Paranagua is expected to export 9.32 million tons in 2015 surpassing the Port of Rio Grande, but still trailing the Port of Santos which is expected to export 12.72 million tons of soybeans in 2015.

While it lost its position as the second leading exporter of soybeans in 2014, the Port of Paranagua kept its position as the leading exporter of soybean meal by exporting 5.17 million tons. The ports of Santos and Rio Grande, which are second and third respectively in meal exports, moved a combined total of 6.41 million tons of soybean meal. Five other Brazilian ports exported soybean meal in 2014, but none of the five broke the one million ton mark in soybean meal exports.

Paranagua kept its top ranking as soybean meal exporter due in large part to the poultry industry in the state. The state of Parana has the most soybean crushing plants in southern Brazil largely to service the poultry industry and exporters.

The Port of Rio Grande has also been aggressive in increasing its export capacity. The port has updated four of its grain terminals and constructed two new grain warehouses increasing its grain storage capacity by 20% to 1.2 million tons. The port not only exports soybeans produced in the state of Rio Grande do Sul, but also from the increasing amount of soybeans being produced in neighboring Uruguay.

While the ports in southern Brazil compete with each other for business, the series of ports on the Amazon River and in northeastern Brazil called the "Northern Arc" have also been increasing their exports. One of the newest ports is the Port of Vila do Conde located near the city of Belem at the mouth of the Amazon River. The port exported 1.0 million tons of soybeans in 2014 after zero exports in 2013. The ports of Santarem and Belem, which are both located in the state of Para, exported 0.88 and 1.4 million tons respectively in 2014.

All the ports comprising the Northern Arc are expected to greatly increase their soybean export activity as new barging operations get underway on the Tapajos River (a tributary to the Amazon River) transporting soybeans that are produced in central and northern Mato Grosso. This new outlet for Brazilian soybeans is expected to help relieve congestion at the southern ports and to accommodate Brazil's ever increasing soybean production. Brazil is expected to produce a new record large soybean crop in 2014/15 of approximately 93 million tons surpassing the old record of 86.7 million tons set just last growing season.

On Friday, January 23rd, the first vessel of new-crop soybeans was loaded at the Port of Paranagua initiating the new soybean export season in Brazil. There are no vessels currently loading soybeans at Paranagua but six vessels are waiting to load a little more than 300,000 tons in the forthcoming days.