Brazil is harvesting a record soybean crop, but its exports of new crop soybeans are being hampered by severe port congestion in the South American nation.
Reuters reports that China’s leading soybean trader, the Sunrise Group, has cancelled almost two million tons of Brazilian soybean cargoes because of shipping delays. Reportedly, some ships are waiting 40 to 50 days to load at Brazilian ports.
Iowa Soybean Association CEO Kirk Leeds, who is traveling with a trade delegation in China this week, says timely and reliable delivery gives the U.S. a leg up in the world market.
“Not wanting to take advantage of our friends in South America, but the continued difficulties they’re having—not only with infrastructure, but with government unrest and labor unrest—is certainly beneficial to the U.S. soybean industry,” says Leeds, “because when you buy soybeans from the U.S., they’re shipped on time and you get what you pay for—that’s certainly a huge advantage to have in this market.”
Iowa Secretary of Agriculture Bill Northey, who is also part of that Chinese trade mission, says it’s also a good reminder that the U.S. needs to maintain its infrastructure.
“We need to be able to be very dependable—very predictable,” Northey says. “You know, we are—but we need to continue to invest in that infrastructure in the U.S.”
ISA director of development Grant Kimberley says Brazil’s shipping issues may force China to purchase more soybeans from other sources. “So I think they are having to come back to the U.S.—and also Argentina and other areas—to continue to purchase soybeans longer into the marketing year than maybe they would have planned to do.”