Brazilian fruit exports face tightening supply of containers

May, 11, 2021 Posted by andrew_lorimer

Week 202120

Brazilian fruit exporters, who were already experiencing difficulties in shipments caused by the pandemic, have had an additional headache since the ship Ever Given ran aground in Egypt’s Suez Canal in March. The incident aggravated the lack of reefer containers in Brazilian ports (the modal is responsible for about 90% of the segment’s exports). In general, the more immediate effects of the stranding on international logistics operations have already been overcome, but it continues to affect container freight prices for Brazilian fruits and vegetables.

“We are facing a complicated scenario. The demand for reefer containers is greater than we can meet. It was the perfect storm, ”says Enrique Garcia, business development director at logistics company Rangel.

Brazilian Fruit Exports | Jan 2016 to Mar 2021 | TEU

According to Garcia, the lack of refrigerated containers is unprecedented during his 14 years at the company – the current supply is at 30% of the supply registered last year. It is expected that the supply of containers for fruits and vegetables will only return to normal towards the end of 2021 or early 2022.

The low supply has affected expenses for exporters. Between February and April of this year, the cost of freight for container shipping rose by 30%, from US$ 6,500 to US$ 10,000. Fruits compete with other essential items that need to be refrigerated, such as medicines and hospital products, which gained priority in the pandemic.

This situation has been reflected in higher prices for Brazilian fruits in Europe, reports Garcia. In some cases, items such as grapes, mangoes, and papayas exported by Brazil today cost twice as much on European shelves as they did before the current boom. Rangel serves large retail chains, such as De Marchi, Fischer, and LPD, with harvest and counter-harvest flow (fruit shipments from Brazil to Europe and also from the European to the Brazilian market).

In the first quarter, fruit shipments from the country totaled 245,100 tons, according to data compiled by ABAFRUTAS (the Brazilian association of fruit and fruit derivatives exporters). This represents an increase of 7% compared to the same period in 2020. The growth is mainly due to sales to neighboring Mercosur countries.

Source: Valor

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