Brazil: freight costs remain high as harvest gathers pace

Freight rates for transporting corn from the Brazilian state of Mato Grosso — the country’s largest producer and exporter — to ports have surged due to the high cost of fuel as well as the increase in demand for trucks.

In Brazil, most grains and oilseeds are transported by truck, for both domestic consumption and exports.

The average freight rate for transporting corn in the first half of June from Sorriso to Santos via road was at real 27.17/60-kg bag as compared to the price of real 19.95/60-kg a year ago, the Mato Grosso Institute of Agricultural Economics, or IMEA, said in a report.

Producers at the time of sowing faced high input costs this year as fertilizer costs surged due to geopolitical tensions, high energy costs and supply issues.

As second-corn crop harvest gathers pace now, consumers are also likely to be burdened with high logistics costs.

Harvesting in the major corn-producing states of Brazil, which accounts for 92% of the cultivated area, was at 11.1% as of June 18, Brazil’s national agricultural agency Conab said.

Corn crop harvesting over the last few days has slowed as low temperature and rains in June have increased the moisture level in crops, private consultancy AgRural said in a note.

The weather forecast for the next 5 days is largely favorable for harvest in the Center-West region of Brazil as no rains are seen except for some isolated parts of Moto Grosso do Sul, Brazil’s National Institute of Meteorology, or INMET, said on June 20.

However, INMET’s forecast says rains are likely during Jun 21-27 in the southern states of Brazil which may hinder corn harvesting.

Meanwhile, Brazil’s corn exports have picked up over the last few weeks with the arrival of the new crop.

Brazil has exported over 431,393 mt of corn in the first 12 business days of June as compared to 92,169 mt in the whole of June 2021, data released by Brazil’s Secretariat of Foreign Trade showed.

Brazil is usually the second-largest exporter of corn in the world following the US.

Brazil’s national agricultural agency Conab forecasts Brazil’s total corn production in the marketing year 2021-22 (February-January) at a record 115.22 million mt.

Brazil’s 2021-22 corn crop will be marketed from February 2022 to January 2023.
The first-corn crop in Brazil is planted from September-December and harvested over February-May, while the second crop is planted from February to March and harvested from June-July.

Tags: Mato Grosso, ports, freight rates, domestic consumption, trucks, exports, high cost, corn, price, Brazil, Grains, oilseeds