Brazilian exporters are redirecting shipments from Russia to other markets, as trading with Russia has halted.

Trading has ceased as shipments are held up in ports and importers are attempting to renegotiate contracts and extend payment terms due to the depreciation of the Brazilian real against the US dollar.

There is currently excess supply in the Russian market, and the credit crisis has generated contract default risks as products were bought when the real was going strong, according to the Brazilian Exporters' Association (ABIEC).

When trading with Brazilian exporters, Russian importers usually pay 30 percent at the time of sale and the remainder upon the arrival of the product. That 30 percent does not cover costs incurred in the shipping and returning of the product.

ABIEC said Brazilian exporters are reluctant to renegotiate prices, but will accept longer payment terms. On average, a 20-day credit may be given, but importers are requesting for a 10-15 days extension.

Exports to Russia are expected to resume within the next few weeks before Russian ports freeze from winter.