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Rains slow Brazil sugar, grains exports
Global commodities markets are sensitive to prolonged periods of rain over Brazil’s two main southern ports of Santos and Paranagua, which interfere with the loading and unloading of dry-bulk commodities such as raw sugar, soybeans, corn, wheat and fertilizer.
Brazil is a major supplier of the world’s sugar, coffee, soybeans and corn.
“Some sugar ships have been waiting in Santos 10 to 12 days and in Paranagua, 10 days,” said Nicolle Castro, an analyst at shipping agents SA Commodities, adding that average waits were six to seven days in Santos in September.
The lineup is still a far cry from the waits that reached more than a month in 2010. So-called demurrage costs for a Panamax-sized ship that can haul 60,000 tons of dry bulk can be $15,000 to $20,000 a day.
Santos, home to Brazil’s most important port, has received rain 15 of the past 17 days, according to data from local meteorologist Somar. Parana has seen rain four out of the last five days.
Ships arriving to load soybeans and corn, the exports of which have slowed with the crops’ harvests now over for this year, are also waiting longer due to the rains, though still far less than the 30 to 40 days on average during peak harvest.
Another shipping agent who preferred not to be named said ships unloading fertilizer were also seeing delays due to rain. Brazil imports 80 percent of its annual fertilizer needs and is in the initial stages of planting a record grain crop.
Most terminals at Brazilian ports are not covered, meaning they shut down with rain. Data from the trade ministry earlier this week showed sugar exports were down 69 percent in September compared with August even as the harvest progresses.
Last year at this time, distributors were struggling to get fertilizers to farmers in the interior, which helped cause prices for the crop input to rise.
A break in the weather could come soon, though. Somar forecast drier weather next week, which would help bring down the waits for ships.
“This weekend a new cold front will move through like the last one (that is causing rain). Next week, though, will be rather advantageous (for ports),” Somar Forecaster Marco Antônio dos Santos said, referring to expectations for the rains to let up. (Reuters)
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