* Soy ship lineups of 45 days expected in Feb-March
* Soy flow through ports will be most intense in March-April
* First ships scheduled to load in Amazon port in early Feb
By Reese Ewing
SAO PAULO, Jan 24 Big trading houses are
dispatching an armada of ships to Brazil hoping for a good spot
in line to load up a record soybean crop that will largely not
hit local ports for a few more weeks.
The price of Panamax shipping capacity on the global market
has responded in anticipation of bumper grain crops approaching
harvest in South America. Baltic drybulk prices have
risen 15 percent so far in 2013.
Two vessels scheduled to arrive in the next two or three
days in the Amazon port of Itacoatiara will likely be the first
to carry off new crop soybeans. See: Williams Shipping Lineup
Nonetheless, more vessels are scheduled to arrive long
before soybeans reach the ports in anticipation of a rush that
will clog Brazilian infrastructure and slow exports.
"The expectation is that we have lineups of up to 45 days,"
said lead analyst Andre Pessoa at consultants Agroconsult.
"Starting in February we are going to be living this problem
very intensely," he told journalists in Sao Paulo on Tuesday.
If it rains, as it did in 2010 during the loading of
Brazil's massive sugar harvest, the delays could be even
greater. Brazil's ports stop loading during downpours.
Global stocks of soybeans used in a wide array of products
ranging from chicken feed to salad dressing have dwindled to
record low levels due to severe droughts over both the U.S. and
South American farm belts last season.
Brazil is sitting on a record crop of up to some 85 million
tonnes and will be the only main global supplier until Argentina
begins exporting in late March and April.
Brazil's crop is 30 percent bigger than last year's, which
is good news for big importers of soy, such as China. But the
South American farming giant added no new capacity to its ports
despite projections that it would overtake the United States as
the largest producer of soy.
Consultants FCStone estimate that between February and May,
when Brazil is the world's main source of soybeans, the country
will only be able to export a maximum of 22.7 million tonnes.
Pessoa of Agroconsult estimated Brazil's peak capacity to
export soy was about 8 million tonnes a month, if all the
country's ports were operating optimally. Brazil ports are no
strangers to unforeseen disruptions though.
In the past few years, a few ships have added rip
shiploaders, which are vital for getting the soy into the holds
of vessels right off the piers. Rains once washed out the main
mountainous road to the principal grain port of Paranagua.
Ports in Brazil's North, Northeast and South have over the
past decade begun to export smaller volumes of the crop and
taken some pressure off the main southern ports of Paranagua and
Santos, which are prone to congestion.
PREPARE TO WAIT
Yet this season, some of the expected wait to load ships was
premeditated by big importers including China as a way to
increase the odds that they get the first Brazilian soybeans
available for export.
"The cost of demurrage (an idle ship) runs about $15,000 to
$20,000 a day, so if you do the math, it pays to pay for 20
sometimes up to 30 days of demurrage to be the first to load,"
the head of the soy desk at a big multinational trader in Brazil
said. "That seems to be China's strategy."
The rush of soy through the ports will be most intense
during March and April, when most of the 25-million-hectare
soybelt is in full harvest.
Although very early harvesting started in late December in
the main soy state of Mato Grosso, much of this small quantity
will be snapped up by local grain crushing industries for pork
and poultry feed markets and by biodiesel producers.
The crop is still three weeks away from arriving at big
southern ports in volumes sufficient to allow steady loading of
ships, traders said.
Brazil lacks sufficient warehouse and silo capacity to
handle the bumper crop that is coming down the pipeline and
small to medium producers unaffiliated with the big trading
houses have traditionally used trucks and port silos as de facto
storage, but this puts added pressure on infrastructure.
A recent study by the federal statistics institute IBGE
estimates Brazil has just shy of 58 million tonnes of warehouse
and silo capacity to handle what could be 85 million tonnes of
soy this season.
In past years, ports including the main grain port of
Paranagua registered lines of trucks streaming nearly 60 miles
(100 km) from the port. But Santos and Paranagua have since
implemented restrictions, requiring trucks arriving to have
designated ships to pick up their cargoes.
"The days of the long truck lines are over for the most
part," said trader Leao D'Avalo at Granos Consultants based in
Mato Grosso. "But that's not to say we aren't going to have some
major logistic problems February through April."
(Additional reporting by Caroline Stauffer; Editing by Nick