Coronavirus causes concerns over export logistics of Brazil`s soyMar, 24, 2020 Posted by Sylvia Schandert
Data released on Monday March 23 by the government showed that Brazilian imports of soybeans in the first three weeks of March has gained pace in the last five working days, increasing the daily average exported to 479,200 tons. This increase in volume has occured at a time when the global market is focusing its attention on any logistical problems that may affect the flow of a record harvest. By the second week of March, exports from Brazil, the largest global soybean exporter and producer, had registered a daily average of 429,300 tons, according to the Foreign Trade Secretariat (Secex).
In March, Brazil`s oilseed shipments totaled 7.2 million tons, already above the 5 million tons exported in the whole month of February, which was affected by rains delaying this process at the beginning of the harvest. The daily average of shipments in March so far indicates that soybean exports from Brazil should exceed the total registered in the same month last year, when the country shipped around 8.5 million tons. In March traditionally soybean shipments from Brazil increase, but there were expectations of a slowdown after the delays in February and also due to concerns about the coronavirus, which until now have not translated into lower demand for the commodity, although there are concerns about interruptions in the flow as a result of measures to contain the disease.
It is worth remembering that this Monday, a stevedores assembly at the port of Santos was canceled. It had been scheduled to assess whether a strike would lead to better working conditions in the face of concerns about the coronavirus. In China, the soybean bran futures market reached a daily limit, due to tight supply and concern about the flow of the South American harvest.
Regarding logistical concerns, the soy sector still faces issues such as a municipal decree in Rondonópolis, an important agribusiness and logistics hub in Mato Grosso, which determined the closure of all non-essential services and ordered the suspension of operations in local industries, in response to the coronavirus crisis.
According to the director of consultancy Arc Mercosul, Matheus Pereira, while China (the largest importer) is active in soy purchases and has resumed industrial operations now that the outbreak of the disease is more controlled, the concern becomes Brazil`s logistics. “Just as the Chinese had problems, we should have this in the coming weeks, we should see a shortage of human resources temporarily, which may delay Brazilian exports as the coronavirus advances,” he said.
The following chart shows Brazilian soy exports to China and the rest of the world as of January 2015:
Source of graph: DataLiner
- Grains Jan, 30, 2019 0
- Apr, 30, 2020 0
- Ports and Terminals Nov, 07, 2019 0
- Meat Dec, 17, 2019 0