May 26, 2004
Brazil Co-ops Stop Delivering Soybeans To Rio Grande Port
Cooperatives in Brazil's southernmost state of Rio Grande do Sul halted the delivery of soybeans to Rio Grande port due to a dramatic slowdown of exports, according to the state cooperative federation Fecoagro.
Exports have slowed since a soy cargo which left Rio Grande for China two months ago was rejected for containing fungicide-tainted seed and the Agriculture Ministry started rigidly inspecting shipments.
"As a result, the co-op's silo (with a capacity of 500,000 metric tons) is virtually full and we stopped sending trucks from Friday to avoid having long lines," said Rui Polidoro Pinto, the Fecoagro president.
The discovery of the tainted shipments, China's zero tolerance policy to contamination and the government's stringent inspection procedure have made exporters extremely nervous about sending vessels, with the cost that incurs.
On Tuesday, a port authority spokesman said there were currently no soy shipments being loaded after the last shipments waited 10 days for clearance from the Agriculture Ministry before leaving to load at other ports.
"Loading in Rio Grande has become an extremely risky business with China restricting shipments," said Polidoro.
On Monday, Chinese quarantine authorities announced Louis Dreyfus Asia Pte Ltd. and ADM do Brasil Ltda. would be temporarily banned from selling any Brazilian soybeans to China due to contamination of lots.
The companies will be added to a blacklist of firms that includes Noble Grain Pte Limited, Cargill Agricola S/A, Irmaos Trevisan S/A-Ind Com, E Agricultura, and Bianchini S/A Industria. All these firms were banned after a shipment of 58,000 tons was found to be tainted by fungicide-treated seeds.
Polidoro said he hoped President Luiz Inacio Lula da Silva would return from his visit to China this week with a solution to the contamination impasse and co-op deliveries would restart at the port.
China is the main destination for Brazilian soybeans, importing 6.1 million tons in 2003.
