Big trading houses are dispatching an armada of ships to Brazil hoping for a good spot in line to load up a record soybean crop that will largely not hit local ports for a few more weeks.
The price of Panamax shipping capacity on the global market has responded in anticipation of bumper grain crops approaching harvest in South America. Baltic drybulk prices have risen 15 percent so far in 2013.
Two vessels scheduled to arrive in the next two or three days in the Amazon port of Itacoatiara will likely be the first to carry off new crop soybeans. See: Williams Shipping Lineup
Nonetheless, more vessels are scheduled to arrive long before soybeans reach the ports in anticipation of a rush that will clog Brazilian infrastructure and slow exports.
"The expectation is that we have lineups of up to 45 days," said lead analyst Andre Pessoa at consultants Agroconsult. "Starting in February we are going to be living this problem very intensely," he told journalists in Sao Paulo on Tuesday.
If it rains, as it did in 2010 during the loading of Brazil's massive sugar harvest, the delays could be even greater. Brazil's ports stop loading during downpours.
Global stocks of soybeans used in a wide array of products ranging from chicken feed to salad dressing have dwindled to record low levels due to severe droughts over both the U.S. and South American farm belts last season.
Brazil is sitting on a record crop of up to some 85 million tonnes and will be the only main global supplier until Argentina begins exporting in late March and April.
Brazil's crop is 30 percent bigger than last year's, which is good news for big importers of soy, such as China. But the South American farming giant added no new capacity to its ports despite projections that it would overtake the United States as the largest producer of soy.
Consultants FCStone estimate that between February and May, when Brazil is the world's main source of soybeans, the country will only be able to export a maximum of 22.7 million tonnes.
Pessoa of Agroconsult estimated Brazil's peak capacity to export soy was about 8 million tonnes a month, if all the country's ports were operating optimally. Brazil ports are no strangers to unforeseen disruptions though.
In the past few years, a few ships have added rip shiploaders, which are vital for getting the soy into the holds of vessels right off the piers. Rains once washed out the main mountainous road to the principal grain port of Paranagua.
Ports in Brazil's North, Northeast and South have over the past decade begun to export smaller volumes of the crop and taken some pressure off the main southern ports of Paranagua and Santos, which are prone to congestion.