Unease about Brazilian Port Disruptions Persists

Posted on Tue, 03/24/2020 - 13:37

Concerns linger that the coronavirus pandemic will disrupt operations at some of Brazil’s largest ports. South American Crop consultant Dr. Michael Cordonnier says this is “a distinct possibility.” So far, the country’s largest ports have been able to skirt major disruptions or strikes, in part by increasing safeguard measures like hand sanitizing stations and taking workers temperatures, but there’s no guarantee this will last. “Labor unrest at Brazilian ports is a common occurrence during the peak export season even in the best of times,” Cordonnier points out.

He continues that the ag sector is “is particularly concerned about the movement of grain from the fields to the grain storage facilities across Brazil and then the movement of grain from the interior to Brazilian ports.  If loading activities are suspended, the grain storage facilities at the ports would quickly reach capacity and the entire grain transportation system would freeze up.”

Of note, the Brazilian ag community of Canarana, which is located in Mato Grosso, has issued a decree that bars shipping of grains out of the city. Its mayor has enforced a lockdown on all non-essential services, which is also meant to protect the population against the spread of coronavirus. The mayor has also reportedly proposed a 10-day grace period for compliance for grain traders Cargill, Louis Dreyfus and China’s Cofco. Despite the order, at least one local farmer told Reuters warehouses in the area were still receiving grains normally.

This comes at an inopportune time for Brazil, as harvest of a record crop is underway and interest in Brazilian soybeans is high. So far this month, Brazil has exported 7.2 MMT of soybeans, which handily tops the 5 MMT the country shipped in February, according to government statistics released yesterday. That signals Brazil’s total exports for March could top last year’s 8.5 MMT. 

And demand is expected to remain strong. “The vessel lineup for Brazilian soybeans until mid-April is 40% greater than last year at this time,” Cordonnier details.