Port Probz: A Soy-Sugar Standoff

Mar 26, 2021

Soy and sugar-filled cargo ships are playing a seaworthy game of Tetris at Latin American ports these days.

Historically dry conditions have led to Brazil’s slowest soybean harvest in a decade. Farmers now find themselves competing with sugar traders for space at Latin America’s largest shipping port in Santos, São Paulo.

The issue: The price of that limited space and transportation is skyrocketing, and it’s creating a severe delay in shipment.

In a typical year, soybean exports begin sometime around January—but not this go-around. What’s more, sugar production was through the roof in 2020. Although Brazil usually doesn’t start seasonal sugar shipments until April (allowing room for soybean movement), the country currently finds itself still catching up shipping out last year’s sweet stuff.

Global ripple effect: The sticky situation affects other countries, as well: China, for example, can’t get enough soybeans (Brazil is its primary supplier). They already had big expectations: China imported 10.51 million tonnes of the oilseed from Brazil just last June.

And, unfortunately, the U.S. doesn’t have enough beans on hand to help out, either. According to one sourcethe U.S. Department of Agriculture forecast soybean stocks at the Aug. 31 end of the 2020/21 marketing year at 120 million bushels, down sharply from 525 million a year earlier.

Just around the corner: fears that Brazil’s second-corn crop, delayed as well, won’t be harvest-ready by the time frost hits.