April 7, 2004

Brazil's Paranagua Problems Highlight Need For New Soy Ports

Delays and a well-publicized lockout at Paranagua, Brazil's main grain port, highlights the need for new ports to ship Brazil's world-leading soy exports, said a soy sector leader Tuesday.
 
According to Carlo Lovatelli, president of the Brazilian Vegetable Oil Industries Association, known as Abiove, farmers and exporters are being forced to swallow the rising costs of freight and delays at port.
 
"If we are to continue expanding, there needs to be more investment. It's ridiculous," he said on the sidelines of a conference on agriculture in Sao Paulo.
 
He said delays of 25 to 30 days at Paranagua port this year, combined with spiraling road freight costs and demurrage charges of $50,000 per ship, meant that over $1 million can be thrown away on a Panamax vessel.
 
"We could build another terminal with the losses on 20 to 30 vessels," he said.
 
He said major exporters were discussing plans for new terminals. However, earlier in the week, Cargill announced it would suspend investment in its Amazon river soy port of Santarem following a legal battle over the environmental impact of the development.
 
Brazil is expected to become the world's largest exporter of soy and soy byproducts this season.