Asian Mills to Turn to Ukraine as Rains Delay Brazilian Grain Shipments
Because of heavy rains, wait times for vessels at Brazil’s busiest port of Paranagua have extended to 40 days, delaying grain shipments from the key supplier to Asia. And although wait times have extended to 60 days at the busiest point of the country’s soybean exporting season, such wait times are not typical for this time of year.
Rainfall usually stops loading operations at Paranagua because its terminals are not covered, and the port has seen ten days of rain in September, which prevented 20 ships from loading corn, followed by seven days of non-stop rain this month. In addition, high demand for Brazil’s bumper corn crop of 84.7 million tons due to a strong dollar and falling real have caused a bottleneck in loading.
Asian buyers have been buying up Brazilian corn, with Vietnam, one of the world’s fastest growing animal feed markets, buying approximately half a million tons in the last quarter, and Bangladesh ordering 150,000 tons in recent transactions. These Asian buyers usually turn to India in the case of delays from Brazil, however, India’s production has been cut by weather issued related to El Niño, putting buyers in the position of turning to Ukraine and the U.S. for their supplies.
“Mills are not panicking yet but if there are further delays, then buyers will start taking some corn in containers from Ukraine as they wait for Brazilian shipments to arrive,” said a trader in Singapore.
Operations at Paranagua have resume their normal pace as the weather has cleared, but according to a port spokeswoman it will take a period of time to load the 60 vessels waiting to load corn, soybeans, and soymeal.
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