South America Calling

SAO PAULO, Brazil (DTN) -- Brazil's principal grain-exporting ports will start working 24 hours, the federal ports secretariat declared last week.

The news was greeted with applause from soybean exporters, for whom the massive lines of ships waiting to load and subsequent delays cost fortunes, and from farmers, who ultimately foot the bill for Brazil's logistical inefficiency.

The announcement may also be met with bemusement from casual observers abroad, who imagined that Brazilian ports were already working 24/7 like most major commodities hubs across the world.

While most terminals operated day and night, nocturnal port movement was limited by the fact most port officials kept office hours. Customs inspectors, sanitation officials, federal police and port authorities typically work 8 a.m. to 5 p.m. As a result, if a grain shipment was only finished after 5 p.m., the ship would not leave port until the next day, not only delaying that ship's journey but the docking of the next vessel.

The new rules will be applied at Santos and Rio ports this week and at Paranagua and Rio Grande ports from May 3.

The federal government hopes the measure will help reduce delays at ports, which are not able to cope with the volume of soybean and corn to be shipped. In early April, the wait to load soybeans at Paranagua port extended to 65 days.

The delays are causing soybean buyers to switch purchases to the U.S. and Argentina.

In March, Chinese trading firm Sunrise announced the cancellation of nearly 2 million metric tons in Brazilian soybean shipments. Then, last week, another Chinese importer cancelled soybean shipments for the same reason, according to Aprosoja-MT, a Mato Grosso farm group.

According to Katia Abreu, president of the Brazilian Agriculture Confederation, the measure could substantially increase the efficiency of the Brazilian ports.

All this is great. The problem is that port authority budgets haven't been expanded to contract more staff or cover overtime, while the initiative hasn't been squared away with the powerful port unions.

Unions representing customs and sanitary officials at Santos say they will seek court injunctions limiting the working day unless more officials are hired to cover the expanded hours.

Suffice it to say, there is not much of a plan to implement this rule change, and it may take some time before we actually see the ports working properly 24 hours a day.

Extended port hours are just one of a series of small measures that could improve efficiency at Brazil's ports.

Brazilian grain terminals have no facility to cover ship holds during grain loading. As a result, loading must stop every time it rains. Paranagua has had to stop operations on 31 days this year because of rain. The use of covers, such as those used at sugar terminals in Santos, would greatly increase efficiency.

Alastair Stewart can be reached at alastair.stewart@telventdtn.com

(AG/CZ)

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