Promising times ahead for soy, corn, sugar exports at the Port of Santos, say gov’t forecasts

The Port of Santos expects promising times ahead, with Brazilian agribusiness performing well and exports set to follow a similar path. Soybeans, sugar, and corn will continue to be the most exported commodities at the Sao Paulo-based port, with foreseen increases of 3.9%, 4.1%, and 5.3%, respectively.

According to data from the Brazilian government’s National Supply Company (Conab), the estimate for the 2022/23 harvest is a production of 312.2 million tonnes (15% or 40.8 million tonnes higher than 2021/22). Part of this volume will be exported, but not entirely through the Port of Santos, given that the movement of grains in the ports up north is increasing.

“The ports at the region of Santos are traditionally responsible for 40% of all of Brazil’s shipments of soybeans, soy meal, and sugar. If the projected output is confirmed and domestic market demand remains consistent with recent years, shipments through regional terminals are expected to increase,” claims Regis Prunzel, president of the port operators union Sopesp.

According to the Santos Port Authority (SPA), the state-owned company that manages the Port of Santos, 25.6 million tonnes of oilseed grains should leave the country through the Santos by the end of this month. In addition, shipments of 19.1 million tonnes of sugar and 16.8 million tonnes of corn are also projected.

Please find below a chart featuring the exports of soybeans (hs 1201) and corn (hs 1005) shipped through the Port of Santos from January 2019 and Oct 2022, according to the DataLiner market intelligence service.

Soy and corn exports – Port of Santos | Jan 2019 – Oct 2022 | WTMT

Source: DataLiner (click here to request a demo)

An increase in throughput is also expected for next year. Soybean exports should add up to 26.6 million tonnes, while sugar exports are estimated at 19.9 million tonnes and corn at 17.7 million tonnes. In spite of the anticipated increase, SPA claims that the port is prepared to meet the demand.

“This is clear, for example, by the figures obtained in October, when the port saw more than a 100% increase in the volume of soybeans and corn moved (1.5 million and 2.5 million tonnes, respectively). Likewise, the volume of sugar shipped also increased by expressive figures (39.3%), with 2.3 million tonnes loaded,” stressed the port authority.

According to the executive director of the Union of Maritime Navigation Agencies of the State of São Paulo (Sindamar), José Roque, if the soy and corn production figures are confirmed, with no variations arising from unexpected crop failures, 2023 looks set to be another year of record grain exports in Brazil, with Santos remaining the main outlet.

“In addition to the significant volume of corn arriving at the port from the end of this year to the beginning of 2023, Mato Grosso soybeans will arrive early at the Port of Santos. As usual, we should see some ships loaded with the commodity in the second half of January. However, beginning in February, the port’s capacity will be severely tested, and the vessel line-up will expand significantly,” says the executive.

Growth

According to him, two other factors should contribute to the continued export volume growth at the Port of Santos. One is the war between Russia and Ukraine, which dramatically limits grain flow through Ukraine. With that, Brazil ends up playing the role of supplying this volume in the world chain.

The consolidation of Brazilian corn exports to China is another factor. “With governments reaching a consensus and Brazil adapting to Chinese requests, we have everything to make China an important destination for corn as well, while soy continues to be the main one.”

The general director of the National Association of Cereal Exporters (Anec), Sérgio Mendes, says that China negotiated with Brazil a list of requirements for the export of the commodity. “Compared to soybeans, corn is still not a representative grain in Brazilian exports to China. But increasing it means securing another reliable grain supplier for them.”

Queues 

Ensuring the timely arrival of cargo at the Port of Santos and avoiding ship queues at the inlet. These are the major challenges industry executives face with the increased demand for grain exports.

According to Sindamar’s José Roque, with the expansion of exports, the challenge will be accommodating all of the additional volumes while minimizing ship waiting times. Solving this equation is critical for maintaining the Port of Santos profitable.

“Lettin the increase in volume generate queues of ships for more than 30 days will bring high demurrage bills for customers and other short-term consequences, such as diverting vessels to other ports that can be faster to maneuver compared to Santos,” argues Roque.

According to the executive, each year, the need for new investments in warehouses and silos becomes more apparent, allowing port terminals to operate with more than one product at the same time. As a result, there is no reduced efficiency in unloading and shipment flow.

Sopesp’s Regis Prunzel comments on the need to invest in access infrastructure, including rail, with the improvement of the Internal Railroad of the Port of Santos (Fips).

“Another activity that should continue being prioritized next year is dredging. Reforming road accesses are on the government’s agenda, but the present conditions serve well the trucks headed to the grain terminals we see today. On the terminal side, investments are being made to accommodate the larger volumes foreseen to come in the upcoming years,” mentions Prunzel.

Source: A Tribuna

To read the original piece in Portuguese, please access: https://www.atribuna.com.br/noticias/portomar/otimismo-cerca-exportacao-de-soja-acucar-e-milho-pelo-porto-de-santos

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