Brazil Soybean Transportation: Record Brazilian Soybean Crop Drives Higher Transportation Cost

摘要

Brazil's current record soybean harvest is expected to reach 73.6 million metric tons (mt), 7 percent higher than the 2009/2010 levels. The heavy rain of March 2011 delayed the soybean harvest in some regions of the Mato Grosso do Sul (MS), Mato Grosso (MT), Goias (GO), Minas Gerais (MG) states. The rain also led to port congestion at truck unloading export terminal facilities by preventing vessel loadings. Grain must remain dry because moisture can create mold, which lowers grain quality. For example, at the port of Paranagua a line of trucks 20 miles long waited to unload grain. The delay was caused by heavy rain that prevented vessels loading, and a technical problem that disrupted truck service registration, overloading the system. The port of Paranagua is the second largest soybean export port, after Santos. Almost half of all soybean exports are shipped through these two ports. During the first quarter of the year, 65 percent of the Brazil soybean production is harvested and, on average, about 14 percent of the crop is exported. Truck rates typically rise during the first half of the year because of the soybean harvest season. During the 2011 first quarter, the cost of shipping a metric ton of soybeans 100 miles by truck increased nearly 15 percent from $9.97 in the first quarter of 2010 to $11.46 in 2011. This increase surpassed the peak reached in the same period last year. During this quarter, transportation cost as a percentage of the total landed cost of soybean shipments to Shanghai declined up to 25 percent because of a drop in ocean rates and higher farm prices that offset the rise in truck rates. The Reals appreciated 7 percent against the dollar, from 1.8003 Reals per U.S. dollar to 1.6673. The stronger Reals helped producers by lowering prices of imported production inputs, such as chemicals, fertilizers, and farm equipment, as well as lowering ocean rates.