Trucks headed to Rio Grande do Sul

Soy trucks drive to Brazil's southern tip to dodge ship queue - RTRS

22-Apr-2013 13:54

• Soy flows to Rio Grande to escape congestion
• Extra road haulage cost offset by lower ship expenses
• Logistic headaches for soy sector worse than ever

By Peter Murphy

BRASILIA, April 22 (Reuters) - Trucks are making a 1,600 km (1,000 mile) detour to avoid Brazil's two most congested ports, instead taking their soy crop to the country's southern tip where wait times for ships are as much as a month shorter, a shipping agent and port authority said.

The detour demonstrates the lengths the grains sector is going to this year to cope with unprecedented logistical headaches as soy output leaps and investment in infrastructure lags.

A soy crop almost one-quarter larger than last year's has strained infrastructure at those ports to the breaking point with long queues not only of ships waiting to berth, but also of hundreds of trucks sitting idle for days waiting to offload.

"This doesn't usually happen," Rio Grande port press officer Loriana Garibaldi said of the rising flux of grains there. "It's because of the queues at other ports. Here the waiting time is a lot less," she said.

Unprecedented long waits due to underinvestment and delays in revamping infrastructure have cost Brazil dearly this year, with its top soy customer, China, reported to have lost patience and cancelled some loads to buy from the United States instead.

The logistics chaos has also overshadowed what is otherwise a jubilant year for Brazil's soy sector which is set to overtake the United States to become the world's biggest producer thanks in large part to tireless research efforts to boost yields.

Pressing on to Rio Grande where queues are shorter than at the two main grains ports, Santos in Sao Paulo state and Paranagua in neighboring Parana, cuts ships' demurrage costs and crew wage bill, offsetting the expense of the longer road trip.

Charterers typically pay between $15,000 and $25,000 in demurrage or ship rental per day.

The queue of vessels at Rio Grande port in the southern state of Rio Grande do Sul is now about three times longer than a year ago, according to shipping agency SA Commodities/Unimar, with 46 ships waiting by last Friday.

But that queue is only half the length Paranagua's and shorter than in Santos where 59 ships were waiting to load last Friday.

"Rio Grande has good infrastructure and is close to the southeast so they're sending quite a lot of ships there," said Isis Markarian, a representative from SA Commodities/Unimar at Brazil's biggest port, Santos, in Sao Paulo state.

She said ships arriving there now would manage to dock by the first or second week of May while ships at Paranagua may face waits extending as far as early June, depending on which terminal they are headed for.

Waiting times were improving at Santos with the soy harvest now having past its peak, but they were still longer than at Rio Grande, depending on the terminal, Markarian said, while Ships were now arriving at a slower pace than a few weeks ago.

Though the extra cargo is a boon for Rio Grande, the grains sector is desperate for investment in railways and ports and for the extension of a highway from the Center West grains belt to closer northern ports to clear logistics bottlenecks long term.

A new river port in the state of Para reachable by that north-bound highway will be one of the first new facilities to ease transport pressures, but it won't be ready until after next year's soy harvest, meaning another tough year lies ahead.

The government has sent a new regulatory framework governing ports to Congress which aims to make the sector more attractive to private investors and it announced late last week that government agencies at the ports would begin operating 24 hours a day, to help speed the flow of cargo.

(Reporting by Peter Murphy; Editing by Leslie Gevirtz) ((Peter.Murphy@thomsonreuters.com)(+55 61 3426 7025)(Reuters Messaging:peter.murphy.thomsonreuters.com@reuters.net))

Agrishow 2013

With improvements in infrastructure, the next edition of Agrishow should be the best in 20 years
Over R$ 1.2 million was invested in exhibition areas, parking and access

Event will be held from April 29 to May 3

The Agrishow (International Fair of Agricultural Technology in Action) , consolidated as the main agribusiness fair in Latin America, will be held from April 29 to May 3, in Ribeirão Preto (SP), and provide infrastructure improvements in the area of 400,000 meters square.

Over R$ 1.2 million was invested in exhibition areas, parking and access. parking in visitors was increasing the number of collection booths, which will expedite the entry of vehicles and reduce queues. The internal transport visitors between the parking and the South Ordinance will be done with urban bus line, providing greater safety and comfort to visitors. There was also improvement in the coverage of the floors of the taxiways. Besides paving the floors of food courts, the visitor will have more varieties of options establishments with food per kilogram, a la carte restaurant, fast food, snack bars, steakhouses and ice cream.

 - The granting of the area for 30 years took legal uncertainty and is allowing us to implement investments to provide more comfort, flexibility and security to the visitor. Upon completing 20 years of history, Agrishow will have its biggest and best edition, says the president of the fair, Maurilio Biagi Filho. The fair is organized by the Brazilian Agribusiness Association (ABAG), the Brazilian Association of Machinery and Equipment ( Abimaq), National Association for the Promotion of Fertilizers (ANDA) and the Brazilian Rural Society (SRB).

Kory activities the next 10 days

It has been a busy 10 days personally in Brazil, my son has been in hospital but is doing much better. It took 8 months to nail down his diagnoses but he is now on correct meds.
Everything takes time in Brazil. Brazil will teach you patience. Something I did not have the first 30 years of my life.

I have scheduled to meet with investor group from Connecticut Thursday this week.
They are looking at limestone investments in Mato Grosso.
I will give them an overview of Mato Grosso and macro potentials of Brazil
expansion.

I am headed to Ribeirao Preto, Sao Paulo on Monday April 29th. It the big ag
show there. I look forward to visiting with friends and catching up on Brazil
ag trends and machinery sales.

I am working on May newsletter and will send that out to subscribers soon.
I will include 2014 cashflows for Mato Grosso soybeans. Costs keep going higher
and soy prices stable to in a slight downtrend.  The margins are not as robust
as previous two years.

I will update as I know more. Subscribers and VIP clients are always the
first to know.

Eike gets help from BNDES

http://blogs.ft.com/beyond-brics/2013/04/18/batista-gets-another-lifeline-this-time-from-bndes/#axzz2QwVMIZPN

funny how fast things can happen when they need to for a few special ones.

Others wait months for approvals or refusals.

Batista gets another lifeline – this time from BNDES

Apr 18, 2013 7:55pm by Pan Kwan Yuk

1inShare0

0

 Has Eike Batista’s “X” group of companies become too big to fail?

Judging by the amount of help that “Brazil Inc” has been throwing his way, one would be forgiven for thinking so. The latest to lend a helping hand? BNDES, Brazil’s development bank, which on Thursday approved a 10-year, R$935m ($464.6m) loan to Batista’s mining group, MMX Mineracao e Metalicos.

The loan – which is free of interest or principal payments for 12 months – will be used by MMX to extend “a significant portion of its short-term debt” and help complete an iron ore terminal on the outskirts of Rio de Janeiro, the company said.

The loan will no doubt give Batista and his beleaguered businesses some much needed breathing space. Shares of companies in his EBX group have been in freefall after his flagship oil company OGX started missing production targets last year.

With Batista’s listed companies reportedly owing as much as R$7bn ($3.5bn) in debt, his fledgling businesses’ continued failure to hit revenue and production targets have sparked concerns that the flamboyant billionaire might have finally stretched himself too far.

Concerns over Batista’s ability to keep the funding going for his oil, mining and port projects – all of which require a large amount of upfront working capital and do not generate immediate returns – prompted both Standard & Poor’s and Moody’s to slash their ratings on OGX this month.

The BNDES loan approval comes after BTG Pactual, the Latin American investment bank, reportedly extended him a $1bn credit line last month. The bank is run by fellow billionaire André Esteves, who has close ties to the federal government and state governor in Rio de Janeiro, both of which will have welcomed any move.

More relief could also be coming in the form of Petrobras. The state-controlled oil company is currently in talks with Batista about a potential tie-up. The oil major said earlier this month that it could consider leasing a berth in Açu Superport, the giant port that Batista’s LLX Logistica is currently building in the state of Rio de Janeiro. The port has reportedly been struggling to attract investors. So any deal with Petrobras would be greatly received by LLX.

It’s a similar story for MMX. The miner, which announced net loss of $400m in 2012 (compared to a $10m loss the year before), have seen its shares lost 80 per cent of their value over the past year.

Shares rallied on Thursday by 3.9 per cent on the BNDES deal.

Batista once called BNDES, “the best bank in the world”. With one estimate putting the amount that his companies have received from BNDES since 2005 at R$10bn, small wonder he’s singing the bank’s praises.

Brazil corn ethanol mill update

Corn ethanol mills catching on in Brazil

http://www.brasilagro.com.br/index.php?/noticias/detalhes/11/50150


Farmers and ranchers in South Chapadão met, on Thursday (11), with Mayor Luiz Felipe Barreto and secretaries Ilton Henrichsen (Works), Altair Bevilacqua (Finance), Tiago Maia (Development and Environment) and Charles Sturmer (Deputy Secretary of Government) when the project was presented a U.S. group that the city intends to install an ethanol plant corn.

As this is unheard of in the country, two representatives of corporate executives Bio Urja Trading LLC and POET gave an explanation about what it is, how it works and the benefits of plant Eetanol, which will also be the first Bio Refinery in Brazil.

According to information from city hall, the production of corn ethanol is a reality in the United States as well as the ethanol is produced from sugar cane for Brazilians. Bio Urja Trading Group LLC and POET have 82 terminals of this type in the country and are responsible for 10% of the U.S. market for ethanol. In addition, the company exports the fuel to Japan, Australia and Africa.

During the meeting, the executives reported that interest in producing corn ethanol in Brazil is the result of a study that shows that by 2020 will require at least 20 more plants to keep the fuel supply of the Brazilian fleet.

Furthermore, the gas tends to be more costly in the next few years. The many distilleries installed on called Corn Belt - the U.S. corn belt - also reveal that the fuel tends to gain space. In addition to corn ethanol, the plant of this size produces the DDG, a byproduct that is added in this process and is used in animal feed because it contains high energy and protein.

Chapadão South was the city chosen for the project because of all the other State, "is bringing together everything that is needed: entrepreneurship, technology, good location, lots of acreage and livestock," said Marcos Machado, representative group.

The difference in plant corn in South Chapadão is that, in order to lower production costs, will be used as fuel for boilers Biomass calls: Brachiaria grass and straw. In the USA natural gas is used, which is still expensive in Brazil.

Partnership

According to representatives of U.S. companies, the corn plant operates 350 days a year and uses this period about 340 thousand tons of grain.
The producers of South Chapadão showed up excited about the venture.
For the schedule of the group if the deal closes, the plant will start its activities in South Chapadão in early 2015, offering around 150 direct jobs and more than 500 indirect jobs. For that will be invested about 70 million dollars 4/14/13

In The Wake Of Brazil's Boom, Prices To Match

http://www.npr.org/2013/04/12/176956307/in-the-wake-of-brazils-boom-prices-to-match

wheat tariff reduced

DJ Brazil Cuts Cotton Tariff, Increases Wheat Import Quota

 

  SAO PAULO--Brazil's government said Tuesday it cut the tariff on imported
cotton fiber and doubled the quota of wheat that can be imported with no
tariff, both for limited time periods.

 

  Up to 80,000 tons of cotton fiber can be imported from May 1 through July 31
without paying a 10% tariff, the country's trade ministry said. The goal is to
ensure supplies for Brazil's textile industry before the cotton harvest starts
in June, according to the ministry.

 

  The amount of wheat that can be imported without paying a 10% tariff was
doubled to 2 million tons through July 31. The tariff was cut because of a
decline in the wheat harvest in Brazil's main supplier of the grain, Argentina.