Brazil will, for the first time, have two consecutive years of negative export premiums for soy and corn, due to a deficiency in the country’s logistics chain. This is what a study commissioned by Kepler Weber and released during the 39th Agrishow, in the interior of São Paulo, reveals.
“The survey is impressive because it demonstrates how much post-harvest inefficiency costs, from farms to shipment at ports in Brazil. There are R$41.4 billion that the country will lose when the years 2023 and 2024 are combined”, says Bernardo Nogueira, CEO of the company.
The grain export premium can be positive or negative, and its formation will depend on some variables, such as exchange rate and, in the case of soybeans, for example, the amount paid in Chicago (USA) compared to the price of the grain when it arrives at the ship (Free on board).
The award takes into account the origin and destination of the exported product, quality, opportunity, sea freight, demand and efficiency of the exporting port. The market monitors these factors and applies this premium to the Chicago Stock Exchange share price (CBOT).
Thus, if conditions are favorable at the exporting port, the premium receives a premium. If they are unfavorable, it will be negative, that is, with a discount. During the harvest, supply and demand at ports also impact costs.
With a very large volume to transport, road freight becomes more expensive, while export premiums may suffer depreciation. In addition to this port variation, there is seasonality in ports. Prize negotiations are ongoing throughout the year.
“To a large extent, the origin of this problem is the fact that Brazil lives with a storage deficit of more than 100 million tons, because the lack of somewhere to store what it produces impacts the formation of export premiums”, highlights Nogueira.
Losses in soybeans
In the case of soybeans, losses total R$20.1 billion in 2023 and 2024. Negative export premiums impacted results between March and July last year and between January and May this year, according to the Kepler Weber study.
“Investment in storage represents greater efficiency in the agribusiness chain, and, at the end of the day, it is decision-making power for the farmer, when to sell, dispose of, and this leads to better profits”, concludes Nogueira.
Corn Prize
The survey shows that the accumulated losses in the two years will be greater in corn, totaling R$21.2 billion.
Last year, negative premiums impacted the commodity’s results between May and September. In 2024, the negative period began earlier, projected to occur between April and September.
Tags: Brazil records negative premium soybeans corn consecutive years #1st time
