5th Oct 2012, by Agrimoney
Transport hiccups are increasingly overshadowing hopes for Brazil's next soybean crop, curtailing sowings in the main producing state besides curtailing hopes for exports which world buyers are clamouring for.
The US Department of Agriculture's Brasilia bureau raised its forecast for the 2012-13 Brazilian soybean crop, currently being planted, by 82.0m tonnes, 1.0m tonnes above the department's official forecast, citing the boost to yields from extra fertilizer applications.
"Record fertilizer imports of an estimated 29m tonnes in 2012 coupled with increased use of certified seed, genetically engineered seed, and other inputs will result in close to record yields of 3 tonnes per hectare," the bureau said in a report.
Last season, the yield was less than 2.7 tonnes per hectare.
'Huge demurrage costs'
However, the upgrade was at odds with evidence from other commentators that Brazil's squeezed logistics are hampering fertilizer imports, besides their distribution to important growing areas, including Mato Grosso, the top soybean-growing state.
PotashCorp, the world's biggest potash group by capacity, forecast that Brazil's imports of the nutrient would ease to 7.0m tonnes this year, from 7.4m tonnes last year, citing port hold-ups.
"Port congestion and logistical issues remain the key constraint in meeting this record second half demand with delays reported as much as 65 days over the past few months, causing huge demurrage costs for importers," the Canadian-based group said.
Slowdowns are being exacerbated by a work slowdown in southern Brazilian ports amid negotiations with state officials over new labour agreements.
'Slower planting pace'
And once on shore, deliveries to farms are being hampered by the impact of laws introduced in June limiting the hours that truck drivers can work, which have fuelled a 20% rise in freight costs, with a further 20% expected by the time the soybean harvest begins in earnest in February, according to the USDA bureau.
In cutting the number of trucks available, the new laws have meant that "most independent drivers are only accepting short hauls where they can be assured of making money", Michael Cordonnier, at Soybean and Corn Advisor, said.
"Getting the fertilizers from southern Brazil to Mato Grosso is a very long haul, which is exactly the type of trips that the independent drivers are avoiding."
"These logistical problems could result in a slower planting pace of the 2012-13 soybean crop than what was originally anticipated."
'Already-deficient ports'
The USDA bureau itself acknowledged the threat posed by Brazil's logistical squeeze in pegging the country's soybean exports in 2012-13 at 38.5m tonnes.
This figure, while a record, and enough to take Brazil above the US among shippers of the oilseed in 2012-13, is 1.4m tonnes lower than the USDA's official forecast.
"The record crop estimated for soybeans and near record crops estimated for corn and sugarcane in 2012-13 will strain already-deficient port capacities and further increase logistics costs," the bureau said.
"Many sources confirm that the limiting factor to export this next crop year will be inland transportation deficiencies coupled with inadequate flow at port receiving terminals."
Corn vs soybeans
Separately, the Buenos Aires Grains Exchange underpinned expectations for the Argentine soybean harvest by saying that sowings will hit a record 19.7m hectares for 2013-13, a rise of 4.5%.
With farmers' finances hurt by drought last year, "it is natural for there to be more interest in [planting] soybeans, to the detriment of corn", which is more expensive to sow, the exchange said.
In Paraguay, the fourth-ranked soybean exporter, the harvest could top 8.4m tonnes, farm minister Enzo Cardozo implied, estimating the yield at 3.0 tonnes per hectare on sowings of 2.82m hectares.
The USDA has estimated the crop at 8.1m tonnes.
Transport hiccups are increasingly overshadowing hopes for Brazil's next soybean crop, curtailing sowings in the main producing state besides curtailing hopes for exports which world buyers are clamouring for.
The US Department of Agriculture's Brasilia bureau raised its forecast for the 2012-13 Brazilian soybean crop, currently being planted, by 82.0m tonnes, 1.0m tonnes above the department's official forecast, citing the boost to yields from extra fertilizer applications.
"Record fertilizer imports of an estimated 29m tonnes in 2012 coupled with increased use of certified seed, genetically engineered seed, and other inputs will result in close to record yields of 3 tonnes per hectare," the bureau said in a report.
Last season, the yield was less than 2.7 tonnes per hectare.
'Huge demurrage costs'
However, the upgrade was at odds with evidence from other commentators that Brazil's squeezed logistics are hampering fertilizer imports, besides their distribution to important growing areas, including Mato Grosso, the top soybean-growing state.
PotashCorp, the world's biggest potash group by capacity, forecast that Brazil's imports of the nutrient would ease to 7.0m tonnes this year, from 7.4m tonnes last year, citing port hold-ups.
"Port congestion and logistical issues remain the key constraint in meeting this record second half demand with delays reported as much as 65 days over the past few months, causing huge demurrage costs for importers," the Canadian-based group said.
Slowdowns are being exacerbated by a work slowdown in southern Brazilian ports amid negotiations with state officials over new labour agreements.
'Slower planting pace'
And once on shore, deliveries to farms are being hampered by the impact of laws introduced in June limiting the hours that truck drivers can work, which have fuelled a 20% rise in freight costs, with a further 20% expected by the time the soybean harvest begins in earnest in February, according to the USDA bureau.
In cutting the number of trucks available, the new laws have meant that "most independent drivers are only accepting short hauls where they can be assured of making money", Michael Cordonnier, at Soybean and Corn Advisor, said.
"Getting the fertilizers from southern Brazil to Mato Grosso is a very long haul, which is exactly the type of trips that the independent drivers are avoiding."
"These logistical problems could result in a slower planting pace of the 2012-13 soybean crop than what was originally anticipated."
'Already-deficient ports'
The USDA bureau itself acknowledged the threat posed by Brazil's logistical squeeze in pegging the country's soybean exports in 2012-13 at 38.5m tonnes.
This figure, while a record, and enough to take Brazil above the US among shippers of the oilseed in 2012-13, is 1.4m tonnes lower than the USDA's official forecast.
"The record crop estimated for soybeans and near record crops estimated for corn and sugarcane in 2012-13 will strain already-deficient port capacities and further increase logistics costs," the bureau said.
"Many sources confirm that the limiting factor to export this next crop year will be inland transportation deficiencies coupled with inadequate flow at port receiving terminals."
Corn vs soybeans
Separately, the Buenos Aires Grains Exchange underpinned expectations for the Argentine soybean harvest by saying that sowings will hit a record 19.7m hectares for 2013-13, a rise of 4.5%.
With farmers' finances hurt by drought last year, "it is natural for there to be more interest in [planting] soybeans, to the detriment of corn", which is more expensive to sow, the exchange said.
In Paraguay, the fourth-ranked soybean exporter, the harvest could top 8.4m tonnes, farm minister Enzo Cardozo implied, estimating the yield at 3.0 tonnes per hectare on sowings of 2.82m hectares.
The USDA has estimated the crop at 8.1m tonnes.
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