Heavy rains at the end of January into February has delayed Brazil’s soybean harvest and disrupted logistics causing the worst congestion in Brazil’s grain ports for some  years. With virtually no beans exported in January and a mere 2.9 MMT in February (compared to 4.8 MMT in February 2020) , vessels have arrived with no cargo in the silos thus line-ups have grown rapidly such that 140 Panamax/Kamsarmax and 41 Handy/Supra/Ultramax are currently at anchor in Brazil’s 14 main grain loading ports.  Clearly the knock on effect of less available tonnage especially in the pacific (than is usual in Q1) is inflating rates and with a fall in new building deliveries (e.g. only two Kamsarmax came out of yards in February), lack of additional supply is likely to prolong the current strong sub cape market. However significant quantities of soybeans are now arriving at ports so we are likely to see a big bounce in monthly exports, perhaps as much as 15 MMT transported in March, which if confirmed would be an all-time monthly record.  Should terminals be able to achieve this throughput then we may be seeing congestion peaking at present levels, though with the Brazil soybean harvest forecast to be a record 133 MMT, overall shipments may exceed 2018’s record 83 MMT.

From Howe Robinson Research – 15 March 21