South America Calling

Brazil expects grain production to rise 15 million metric tons in 2013-14, potentially creating even more pressure on the country's overstretched port and transport infrastructure.

In response to concerns that Brazil's grain export logistics won't be able to cope, the government Wednesday announced a plan to help speed up port and road operations.

But the truth is there is nothing of substance that is new among the measures.

The headline promise is that authorities will work 24 hours a day at ports. This was a promise made last year and already implemented part of the time at some ports.

At Santos port, the main improvement will be the duplication of rail tracks serving the ports, which the government claims will greatly reduce unloading times. An intelligent truck management system will also be implemented, which will limit the flux of trucks to the port and reduce tailbacks.

That seems very little

Fortunately, there are a number of factors that may reduce pressure on Brazilian ports this year.

First of all, while Brazilian soybean output is expected to jump over 10% to around 90 mmt, exports are not expected to rise at the same rate. Soybean shipments will rise 5% to 45 mmt in 2014 compared with 35% in 2013, according to projections by Safras e Mercado, a local farm consultancy.

Secondly, the market will not be as desperate for soybeans in the first half of 2014 as it was in 2013 after another good U.S. crop.

Thirdly, corn exports were extremely strong in the first quarter of 2013. This season, shipments are not expected to be as strong, which will allow exporters to organize soybean shipments much better.

Meanwhile, there have been some improvements at private terminals, which will add incremental capacity.

Of course, one big variable is the weather as ship loading is halted when there is rain. A dry March at Santos and Paranagua would hurry along operations enormously.

(AG)

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