Brazil, March 26, 2004 -- CropChoice news -- Michael
Smith, Bloomberg News, 03/24/04: Soybean prices
surged to a 15-year record Monday on the Chicago Board
of Trade as trucks carrying the grain backed up 43 miles
at a port south of Sao Paulo where a labor dispute stopped
Fifty ships were anchored in and around Paranagua, Brazil's biggest soybean
port, as grain companies stopped operations to protest
shipping delays they blame on the management of the
The lockout of 11,000 dockworkers is blocking shipment
of 80,000 metric tons of soybeans a day to Europe and
other markets. Unions support the lock-out to press
31 demands for better wages and benefits, including
the right to overtime, said Fabiano Elias, a lawyer
for several dockworker's unions at the port.
"Everyone is behind this action, and it won't
end until the port management is replaced," Elias
The four-day shutdown has contributed to an 85 percent
jump in soybean prices in the last year as global demand
"Nobody can get any beans out of there ... so
prices are going to have to go up," said Troy Vetterkind,
a trader at eHedger in Chicago.
Soybeans for May delivery rose 32 cents, or 3.1 percent,
to $10.56 a bushel Monday after rising 7.1 percent last
While the port problems are the cause of the latest
price spiral, Cargill Inc., the largest U.S. agriculture
company, says transportation bottlenecks will limit
future growth of Brazil's soybean industry.
Brazil, the world's second-largest soybean grower,
will only boost production 4 percent this year, a sixth
the pace of last year's gain, said Jose Luiz Glaser,
who runs Cargill's soybean business in Brazil.
"Growth is going to be smaller as a function of
a lack of infrastructure to move a much bigger crop,"
Glaser said in an interview in Sao Paulo.
Wayzata, Minn.-based Cargill will handle almost a fifth
of the 54 million metric tons of soybeans that Brazil
will probably produce this year, Glaser said.
Brazil more than doubled soybean production over five
years to meet rising demand from Europe and China.
Flooding, droughts and a blight known as Asian soybean
rust led Brazil and the United States to cut official
forecasts for this year's crop.
Backed up ports
Even before the latest labor problems, Paranagua was
already plagued by problems that are causing ships to
wait 30 days to be loaded, Glaser said.
"This chaotic situation is really hurting us,"
said Cesar Borges de Sousa, vice president of the Brazilian
vegetable oil processor's association.
Brazilian President Luiz Inacio Lula da Silva has pledged
to boost spending on ports, railroads and highways to
increase exports the country needed to revive an economy
that last year had its biggest slump since 1992. Brazil's
agriculture ministry estimates soybean sales will surge
43 percent to $12 billion this year, or 15 percent of
expected total exports.
Farmers in Brazil have planted more crops as demand
grew from China, which has more than doubled imports
of soybeans, mostly to make into animal feed as meat
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