Brazil is the world's largest soybean exporter and should continue to occupy this position as production grows.
Traditionally, most of Brazilian soybean leaves the country through ports in the Southeast and South, especially Santos, from where most of the oilseed is shipped out.
However, these ports are far from the producing regions in the Center and North of the country. The state of Mato Grosso stands out as the largest national producer of soybeans, but its distance from ports is large, resulting in major price discounts for producers.
Even though the more traditional ports continue to sell most of the Brazilian soybean, the terminals from the so-called Northern Arc have gained market share year after year. Investments in the terminals themselves, as well as in the logistics to reach them, such as paving highway BR-163, have allowed exports to growth in this region, by reducing the cost of transport.
In 2022, it is observed that soybean exports are weaker than in the same period last year. In the first half of this year, 53 million tonnes were shipped, against 57.5 million in the first half of 2021. In addition to Brazilian production's drop this year because of the crop failures mainly in the South, there are concerns on the demand side, such as the Chinese appetite, as the country adopts zero tolerance against Covid-19, in addition to the macroeconomic context of a possible recession around the world.
On the other hand, even with this drop in soybean exports in the first half of the year, Northern Arc ports increased their share of the total, both in relative and absolute terms. By June 2022, 20.8 million tonnes of soybeans had been shipped from there, or 39.2% of the total. In the same period of 2021, exports through the Northern Arc Norte accounted for 33.4% of the total, reaching a volume of 19.2 million tonnes.
In any case, even though the Northern Arc is increasingly consolidated in Brazilian soybean exports, that does not mean that ports in the South and Southeast are losing their importance. Through the port of Santos alone, larger volumes of soybean were shipped than from the entire Northern Arc in the first half of 2022 and 2021. However, as the 2021/22 crop failure was concentrated in the south of the country, traditional ports ended up being more affected by the lower availability of the oilseed in 2022, with emphasis on lower shipments in Rio Grande and Paranaguá.
Brazilian soybean exports in the first half of 2022 (million tonnes)
Source: Comex Stat. Design: StoneX.
Corn
Brazil stands out in the international corn trade, frequently being among the three main global exporters. Iran, Egypt, and Spain are major destinations for corn exported by Brazil and, therefore, given the greater proximity of these countries, it would be natural for an increase in flow through ports located in the Northern region of Brazil as the region's logistics infrastructure develops.
However, when we look at shipments for the first half of this year, one can get the impression that the country is not increasing its flows through the Northern Arc. In the first six months of 2022, 1.9 million tonnes of corn left the country through ports in the region, a volume that was 12.8% higher than the average of the last four years. However, the total volume shipped reached 6.4 million tonnes, 21.9% more than the average of the last four years, suggesting that the growth of shipments through the ports of the region was lower than the national average.
On the other hand, it is important to make some considerations. Corn exports from Brazil are not truly relevant in the first half of the year, since most of the first crop's production, which is harvested at the beginning of the year, is used to supply the domestic market. In addition, most of the volume from the summer crop is produced in the South and Southeast regions. Therefore, it is not prudent to rely solely on data referring to the first half of the year to outline a profile of Brazilian shipments.
In the calendar year, there has been a more expressive increase in shipments from the Northern Arc over the last few years. Between 2015 and 2018, Brazil exported an average of 6.2 million tonne of corn through the Northern Arc per year, while in 2019 and 2020 this volume exceeded 14 million. In addition to the growth in volume, it is also worth mentioning the increase in participation, which went from 24% between 2015 and 2018, to 33% in 2019 and 41% in 2020. In 2021, the volume of shipments through the Northern Arc declined, but this drop was observed in exports as a whole, a movement caused by the 2020/21 safrinha crop failure. However, despite the decline in shipments, the share of the Northern Arc rose to 47% that year.
For 2022, the perspective is that shipments from the region will grow again. In recent years, more than 70% of the corn shipped through the Northern Arc came from Mato Grosso and, amid expectations of record production in the state in 2021/22, the trend is that the flow of corn through the region's ports will also be high.
Brazilian corn exports in the first half of 2022 (million tonnes)
