Not only fert bottleneck but grain as well. Maybe FNA should be on top of this, could be some cheap fert to be had.
Fertilizer trapped at ports threatens Brazil grain crops
* Strikes, rain, poor investment expose weak infrastructure
* Fertilizer distributors held hostage by port backlogs
* Planting of new soy, corn crop only weeks away
By Reese Ewing
SAO PAULO, Aug 16 (Reuters) - Over a million tonnes of fertilizer at ports in Brazil might not make it to local soy and corn farmers in time for planting to help fill a supply gap left by a drought in the U.S. farm belt.
Brazil, which has not invested significantly in its ports in decades, relies on imports for more than 80 percent of its fertilizer needs. A flurry of strikes by port workers, inspectors and truckers has exposed this as a major weakness of the Brazilian agricultural sector.
Brazil is the most important producer and exporter of food after the United States. In addition to leading in sugar, coffee, orange juice, beef and poultry exports, Brazil has become the second largest soy and third largest corn exporter.
Global markets are looking to Brazil to help refill grain stocks after the U.S. drought created a shortfall of more than 50 million tonnes of corn.
A lineup of more than 60 ships carrying fertilizer, with some waiting 48 days to unload at Brazil's main grain port of Paranagua, highlights the dire state of the county's infrastructure after decades of under investment. The constant bottlenecks and high expense contribute to what investors call the "Brazil cost."
"There is a risk to the supply of fertilizer," said David Roquetti, the chief executive of fertilizer distribution association Anda. "Sales by mixers and distributors are in chaos right now. They are being held hostage."
BOTTLENECKS
Heavy rains in May and June also slowed unloading at Paranagua, which accounts for more than 50 percent of Brazil's fertilizer imports. And under investments in infrastructure, especially ports, roads and railways over the past decades has only exacerbated bottlenecks.
Fertilizer sales in Brazil reached a record 28.3 million tonnes in 2011, well up from the previous record of 24.5 million the year before. And local bank analysts are projecting demand for 29 million to 29.5 million tonnes this season.
The tight supply of fertilizer on the local market only weeks before farmers start planting what is expected to be a record grain crop will likely push up prices.
However, analysts say grain prices have luckily been rising much faster than fertilizer prices.
The large expansion in Brazilian soy planting is likely to lead to shortages in other crop inputs such as seeds and pesticides, agrochemicals company Syngenta AG said on Thursday.
A local broker at one of the world's biggest fertilizer traders said 1 million to 2 million tonnes of mostly potash and phosphate are either waiting to unload at Brazilian ports are at sea heading here now.
Large grain traders such as Bunge Ltd, Archer Daniels Midland Co and Cargill Inc are some of the main buyers of this fertilizer in Brazil, which they then trade to farmers in exchange for soybeans and corn.
"The disgrace is the $2 billion in annual demurrage costs at Brazilian ports that could go to building four to six new ports," the broker said, referring to the cost of a ship sitting in port waiting to load or unload, which can run about $15,000 a day for some vessels.
"Cargill built a grain terminal in Santarem (in northern Brazil) and it took two more years after it was done to get license to open it. We are talking about Cargill here, not some rinky dink operation."
Building a new port or expanding existing terminal capacity is a Herculean task in Brazil. Environmental, regulatory and political obstacles raise the cost of business across the country.
On Wednesday, the Brazilian government unveiled measures to lure up to $66 billion in private investment as part of a new effort to improve the overburdened infrastructure.
(Editing by Andre Grenon)
Fertilizer trapped at ports threatens Brazil grain crops
* Strikes, rain, poor investment expose weak infrastructure
* Fertilizer distributors held hostage by port backlogs
* Planting of new soy, corn crop only weeks away
By Reese Ewing
SAO PAULO, Aug 16 (Reuters) - Over a million tonnes of fertilizer at ports in Brazil might not make it to local soy and corn farmers in time for planting to help fill a supply gap left by a drought in the U.S. farm belt.
Brazil, which has not invested significantly in its ports in decades, relies on imports for more than 80 percent of its fertilizer needs. A flurry of strikes by port workers, inspectors and truckers has exposed this as a major weakness of the Brazilian agricultural sector.
Brazil is the most important producer and exporter of food after the United States. In addition to leading in sugar, coffee, orange juice, beef and poultry exports, Brazil has become the second largest soy and third largest corn exporter.
Global markets are looking to Brazil to help refill grain stocks after the U.S. drought created a shortfall of more than 50 million tonnes of corn.
A lineup of more than 60 ships carrying fertilizer, with some waiting 48 days to unload at Brazil's main grain port of Paranagua, highlights the dire state of the county's infrastructure after decades of under investment. The constant bottlenecks and high expense contribute to what investors call the "Brazil cost."
"There is a risk to the supply of fertilizer," said David Roquetti, the chief executive of fertilizer distribution association Anda. "Sales by mixers and distributors are in chaos right now. They are being held hostage."
BOTTLENECKS
Heavy rains in May and June also slowed unloading at Paranagua, which accounts for more than 50 percent of Brazil's fertilizer imports. And under investments in infrastructure, especially ports, roads and railways over the past decades has only exacerbated bottlenecks.
Fertilizer sales in Brazil reached a record 28.3 million tonnes in 2011, well up from the previous record of 24.5 million the year before. And local bank analysts are projecting demand for 29 million to 29.5 million tonnes this season.
The tight supply of fertilizer on the local market only weeks before farmers start planting what is expected to be a record grain crop will likely push up prices.
However, analysts say grain prices have luckily been rising much faster than fertilizer prices.
The large expansion in Brazilian soy planting is likely to lead to shortages in other crop inputs such as seeds and pesticides, agrochemicals company Syngenta AG said on Thursday.
A local broker at one of the world's biggest fertilizer traders said 1 million to 2 million tonnes of mostly potash and phosphate are either waiting to unload at Brazilian ports are at sea heading here now.
Large grain traders such as Bunge Ltd, Archer Daniels Midland Co and Cargill Inc are some of the main buyers of this fertilizer in Brazil, which they then trade to farmers in exchange for soybeans and corn.
"The disgrace is the $2 billion in annual demurrage costs at Brazilian ports that could go to building four to six new ports," the broker said, referring to the cost of a ship sitting in port waiting to load or unload, which can run about $15,000 a day for some vessels.
"Cargill built a grain terminal in Santarem (in northern Brazil) and it took two more years after it was done to get license to open it. We are talking about Cargill here, not some rinky dink operation."
Building a new port or expanding existing terminal capacity is a Herculean task in Brazil. Environmental, regulatory and political obstacles raise the cost of business across the country.
On Wednesday, the Brazilian government unveiled measures to lure up to $66 billion in private investment as part of a new effort to improve the overburdened infrastructure.
(Editing by Andre Grenon)