Feb 28, 2014
Southern Ports in Brazil facing Northern Competition
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The ports of Paranagua in the state of Parana and Rio Grande in the state of Rio Grande do Sul are facing stiff competition for soybean exports from newer ports in northern Brazil. In response, the ports are ramping up their efforts to stay competitive by increasing their capacity and improving the logistics at the ports.
The two ports are planning to increase their collective export capacity by 12% in 2014 (an increase of 2 million tons) in order to maintain their 37.5% share of Brazil's soybean exports. The Port of Rio Grande took over second place in soybean exports in 2013 surpassing the Port of Paranagua for the first time. Rio Grande exported 8.27 million tons of soybeans in 2013 compared to 7.78 million tons at Paranagua and they are expecting to increase that again in 2014 to 9.2 million tons. The Port of Santos maintained its leadership position in soybean exports in 2013 by exporting 12.9 million tons.
Oddly enough, some of the increased exports at the Port of Rio Grande in 2013 came from the distant soybean fields of Mato Grosso and Mato Grosso do Sul. Transporters sent additional soybeans to Rio Grande in order to avoid the long delays associated with uploading soybeans at the Ports of Paranagua and Santos. A truck from Mato Grosso had to travel 535 and 715 kilometers further to reach the Port of Rio Grande as compared to Paranagua or Santos respectively, but even though the distances were further, it was faster and cheaper to go the southern port.
The Port of Rio Grande also has been receiving soybeans from northern Argentina and Uruguay as well. Soybean production in northern Uruguay has expanded significantly in recent years and the production area is half the distance to the Port of Rio Grande as compared to the 400 kilometers it takes to get to Montevideo.
There are four terminals at the Port of Rio Grande and vessel loading at the most efficient terminal (Tergrasa) has been reduced from 24-28 hours for a 64,000 ton vessel to 18 hours. The other three terminals are expected to follow suite.
On average vessels wait 10-12 days to load at the Rio Grande port and at critical times it might be as long as two weeks, but that is still half the time vessels are forced to wait at Paranagua. The Port of Paranagua has tried to reduce the wait times by creating an "express line" for vessels that will only load from a limited number of terminals in order to speed the process.
Currently, 55% of Mato Grosso's soybean exports move through the Port of Santos, but more and more of the soybeans are being sent north to what is being called the Northern Arch which includes ports in the states of Amazonas, Amapa, Para e Maranhao. In 2013/14 approximately 4.5 million tons moved north and that is expected to increase to 9.5 million in 2014/15. As a comparison, 17 million tons of soybeans from the state are expected to be exported from southern ports in 2014/15.
Sending soybeans produced in central Mato Grosso north to the barging operation at Itaituba, Amazonas is 1,000 kilometers or 50% shorter than going to Santos. If soybeans are trucked all the way to the Port of Santarem on the Amazon River, which is 1,370 kilometers from northern Mato Grosso, the savings is 30% compared to Santos, but the last 330 kilometers are not yet asphalted. The amount of soybeans exported out of Brazil's northern ports is expected to increase significantly in the coming years.