PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 11:07 UK, 8th Aug 2012, by Agrimoney.com
Ideas of big crops worsen Brazil transport worries

The prospect of a huge Brazilian soybean harvest ahead, which may earn the country the title of the world's top producer, is heightening concerns over shortfalls in its transport and storage facilities.

Analysis group Celeres this week became the latest commentator to forecast a huge rise in Brazil's next soybean crop, set for harvest early in 2013, pegging it at 78.1m tonnes.

The jump of 17.8%, year on year, reflects in part expectations of improved yields following damage from the El Nino weather pattern to the last harvest, but also an estimate that sowings will rise 8% to 27.14m hectares as farmers seek to exploit elevated prices.

Other analysts have pegged the harvest even higher, with Agroconsult forecasting an 83.1m-tonne crop, potentially enough to top the drought-hit US crop.

'Chronic congestion'

However, the prospect of huge crop volumes to shift to port has raised fears for infrastructure already struggling to cope with an elevated safrinha, or winter, corn crop, and exploit a gap in world supplies created by disappointing US output.

Crop scout Michael Cordonnier, at Soybean and Corn Advisor, warning of "chronic congestion" already at Brazil's ports, said that the "entire logistical situation is expected to get worse in 2013".

Flagging the threat of "logistical gridlock", Dr Cordonnier said that areas far from port looked set to be particularly badly hit, including Mato Grosso, where farmers are expected to double soybean sowings to 1m hectares, besides increasing plantings of safrinha corn seeded as a follow-on crop.

"If the yield of both crops turns out to be very good, there will be significant problems in storing and transporting both of those crops in 2013."

According to Macquarie, it costs $150 a tonne to transport soybeans to port from Mato Grosso, the top producing state, compared with $30-40 a tonne from farms in the US Midwest.

Dumped on the ground

The warnings come amid a campaign by Abiove, the Brazilian vegetable oil association, to persuade authorities to "resume" investment in rail and road projects, such as a R$6.4bn east-west rail link to Mato Grosso put on ice following allegations of corruption.

Many commentators believe that rural infrastructure investment is taking second place to boosting networks needed for the 2014 World Cup and 2016 Olympic Games.

Terming Brazil's transport network "precarious", Abiove said that in Mato Grosso, the completion of warehouses meant that "storage of safrinha corn in the open is already happening", threatening crop quality.

RELATED ARTICLES
Collapse in SA supplies to support soybean prices
Brazil rail costs show future path for crop prices
Football's World Cup threatens agriculture with demotion
Rail, road shortfalls 'to limit' Brazil land grab
LINKS
Agricultural Commodities
Agricultural Markets
Agricultural Companies
Agricultural Events