THE BRAZILIAN SOY COMPLEX ©2004 DEXT - Divisão de Extensão Tecnológica CHARACTERIZATION OF THE BRAZILIAN SOY COMPLEX 1. INTERNATIONAL MARKET 2. DOMESTIC PRODUCTION 3. STORAGE 4. PROCESSING 5. TRANSPORTS 6. LOSSES IN THE PRODUCTIVE CHAIN 7. CONCLUSIONS 8. REFERENCES 1. INTERNATIONAL MARKET ©2004 DEXT - Divisão de Extensão Tecnológica MAIN WORLD PRODUCERS OF SOYBEAN Brazil is the second main soybean grain producer in the world, after the US and followed by Argentina. In the last decade (1990/2005), Brazil and Argentina increased their share of the world production by 25% and 81% respectively, whereas that of the US reduced by 18%. (GRAPH 1.1). In 2004/2005 world production of soybean was 214.425 million tons, 39,8% of which taking place in the US, 23,7% in Brazil and 18,1% in Argentina. GRAPH 1.1 – MAIN WORLD PRODUCERS OF SOYBEAN GRAIN (1990-2005) 90 M ILLIO N S O F TO N S 80 70 60 50 40 30 20 10 USA SOURCE: USDA BRAZIL ARGENTINA 0 4 /0 5 0 3 /0 4 0 2 /0 3 0 1 /0 2 0 0 /0 1 9 7 /9 8 9 4 /9 5 9 0 /9 1 0 MAIN WORLD EXPORTERS OF THE SOYBEAN COMPLEX The three largest producers are also the main exporters of the soybean complex (grain, meal and oil). The US are the main exporters of soybean grain, followed by Brazil and Argentina (GRAPH 1.2). In 2004/2005 the share of each of these countries in total soybean grain exports was as follow : 1º) US: 46,3% 2º) Brazil: 31,7% 3º) Argentina: 14,0% GRAPH 1.2 – MAIN WORLD EXPORTERS OF SOYBEAN GRAIN (1990/2005) 30 MILLIONS OF TONS 25 20 15 10 5 USA SOURCE: USDA BRAZIL ARGENTINA 04/05 03/04 02/03 01/02 00/01 97/98 94/95 90/91 0 MAIN WORLD-WIDE EXPORTERS OF THE SOYBEAN COMPLEX Argentina is the main world exporter of soybean cake and oil, followed by Brazil and US (GRAPHs 1.3 and 1.4). Share of Argentina, Brazil and United States in the world total exports of meal and oil - 2004/2005: Meal Oil Argentina 42,7% 50,7% Brazil 31,5% 26,2% US 14,3% 6,8% GRAPH 1.3 – MAIN WORLD EXPORTERS OF SOYBEAN MEAL (1990/2005) M IL L IO N S O F T O N S 20 15 10 5 USA SOURCE: USDA BRAZIL ARGENTINA 0 4 /05 0 3 /04 0 2 /03 0 1 /02 0 0 /01 9 7 /98 9 4 /95 9 0 /91 0 GRAPH 1.4 – MAIN WORLD SOYBEAN OIL EXPORTERS (1990/2005) M IL L IO N S O F T O N S 5 4 3 2 1 USA SOURCE: MDIC/AliceWeb BRAZIL ARGENTINA 0 4 /0 5 0 3 /0 4 0 2 /0 3 0 1 /0 2 0 0 /0 1 9 7 /9 8 9 4 /9 5 9 0 /9 1 0 MAIN WORLD EXPORTERS OF THE SOYBEAN COMPLEX In 2002/2003 Brazil surpassed US and Argentina in the export of products from soybean complex (grain, meal and oil). (GRAPH 1.5). GRAPH 1.5 – MAIN WORLD EXPORTERS OF THE SOYBEAN COMPLEX (1990/2005) M IL L IO N S O F T O N S 40 30 20 10 SOURCE: USDA BRAZIL 05/06 USA 04/05 03/04 02/03 ARGENTINA 01/02 00/01 97/98 94/95 90/91 0 GROWTH OF THE EXPORTS BY BRAZILIAN SOYBEAN COMPLEX The increase in exports of soybean grain and meal has been stimulated since 1996, after the changes in taxation rules, aiming a reduction on the amount of tax on the domestic trade of commodities. As a result, exports of grains were largely benefited. Exports of soybean oil have been apparently constant as 60% of production is destined to domestic market. (GRAPH 1.6). GRAINL SOURCE: MDIC/AliceWeb MEAL OIL 20 04 20 03 20 02 20 01 20 00 19 99 19 98 19 97 19 96 19 95 19 94 19 93 19 92 22 20 18 16 14 12 10 8 6 4 2 0 19 91 M IL L ION S OF T ON S GRAPH 1.6 – GROWTH OF EXPORTS BY BRAZILIAN SOYBEAN COMPLEX – 1991/2004 MAIN EXPORTING STATES OF SOYBEAN PRODUCTS The major state producers in Brazil are also the main exporters. The share of those states in total exports in 2004 is as follows: Grain: 1º) Mato Grosso: 25% 2º) Paraná: 22% 3º) Rio Grande do Sul: 11% Meal and Oil: 1º) Paraná: 34,0% e 42,9% 2º) Mato Grosso: 21,5% e 20,5% 3º) Rio Grande do Sul: 11,8% e 19,9% PARANÁ SOURCE: MDIC/AliceWeb RIO GRANDE DO SUL MATO GROSSO 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 6,0 5,5 5,0 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 1991 MILLIONS OF TONS GRAPH 1.7 – SOYBEAN GRAIN EXPORTS OF PARANÁ, RIO GRANDE DO SUL AND MATO GROSSO STATES – 1991/2004 PARANÁ SOURCE: MDIC/AliceWeb RIO GRANDE DO SUL 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 5,5 5,0 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 1991 M IL L IO N S O F T O N S GRAPH 1.8 – EXPORTS OF SOYBEAN MEAL BY PARANÁ, RIO GRANDE DO SUL AND MATO GROSSO STATES – 1991/2004 MATO GROSSO PARANÁ SOURCE: MDIC/AliceWeb RIO GRANDE DO SUL 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1,2 1,1 1,0 0,9 0,8 0,7 0,6 0,5 0,4 0,3 0,2 0,1 0,0 1991 M IL L ION S OF T ON S GRAPH 1.9 – EXPORTS OF SOYBEAN OIL BY PARANÁ, RIO GRANDE DO SUL AND MATO GROSSO STATES – 1991/2004 MATO GROSSO MAIN WORLD IMPORTERS The main importing countries of soybean products are: Grain: China, EU-25, Japan, Mexico e Taiwan (GRAPH 1.10) Meal: EU-25, Thailand, Indonesia, Korea and Philippines (GRAPH 1.11) Oil: China, India, Iran, Morocco e Venezuela (GRAPH 1.12) GRAPH 1.10 – MAIN IMPORTING COUNTRIES OF SOYBEAN GRAIN– 2001/2004 MILLIONS OF TONS 30 25 20 15 10 5 CHINA EU-25 JAPAN SOURCE: USDA/Foreign Agricultural Service MEXICO 03/04 02/03 01/02 00/01 0 TAIWAN GRAPH 1.11 – MAIN IMPORTING COUNTRIES OF SOYBEAN OIL – 2001/2004 MILLIONS OF TONS 3,0 2,5 2,0 1,5 1,0 0,5 CHINA INDIA IRAN MOROCCO SOURCE: USDA/Foreign Agricultural Service 03/04 02/03 01/02 00/01 0,0 VENEZUELA GRAPH 1.12 – MAIN IMPORTING COUNTRIES OF SOYBEAN MEAL – 2001/2004 22 20 18 MILLIONS OF TONS 16 14 12 10 8 6 4 2 EU-25 THAILAND INDONESIA SOURCE: USDA/Foreign Agricultural Service KOREA 03/04 02/03 01/02 00/01 0 PHILIPPINES MAIN IMPORTING COUNTRIES OF BRAZILIAN SOYBEAN PRODUCTS The main destination of Brazilian soybean grain is the EU. (GRAPH 1.13). 74% of 9,2 million tons imported from Brazil by the EU in 2004 went to Netherlands, Germany and Spain. China has increased significantly imports since 1997, becoming in 2004 the biggest importer of grain from Brazil (GRAPH 1.14). CHINA SOURCE: MDIC/AliceWeb EU-25 TAIWAN IRAN 2004 2003 2002 2001 2000 1999 1998 1997 11,2 10,4 9,6 8,8 8,0 7,2 6,4 5,6 4,8 4,0 3,2 2,4 1,6 0,8 0,0 1996 M ILL IO N S O F T O NS GRAPH 1.13 – BRAZILIAN SOYBEAN GRAIN MAIN DESTINATIONS – 1996/2004 GERMANY CHINA SPAIN NETHERLANDS ITALY TAIWAN SOURCE: MDIC/AliceWeb 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 6,5 6,0 5,5 5,0 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 1991 MILLIONS OF TONS GRAPH 1.14 – MAIN IMPORTING COUNTRIES OF BRAZILIAN SOYBEAN GRAIN – 1991/2004 THE MAIN DESTINATION OF THE BRAZILIAN SOYBEAN MEAL European Union is the biggest importer of soybean meal from Brazil, which represents 73% of Brazilian exports, followed by Iran, Thailand and Indonesia (GRAPH 1.15). Netherlands, France, Germany and Spain are the main importing countries of soybean meal within the EU. (GRAPH 1.16). THAILAND SOURCE: MDIC/AliceWeb INDONESIA EU-25 2004 2003 2002 2001 2000 1999 1998 1997 11,2 10,4 9,6 8,8 8,0 7,2 6,4 5,6 4,8 4,0 3,2 2,4 1,6 0,8 0,0 1996 M ILLIO N S O F TO N S GRAPH 1.15 – MAIN DESTINATIONS OF BRAZILIAN SOYBEAN MEAL – 1996/2004 IRAN GERMANY NERTHERLANDS SOURCE: MDIC/AliceWeb FRANCE THAILAND SPAIN IRAN 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 5,0 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 1991 MILLIONS OF TONS GRAPH 1.16 – MAIN IMPORTING COUNTRIES OF BRAZILIAN SOYBEAN MEAL – 1991/2004 DESTINATION OF BRAZILIAN SOYBEAN OIL European Union is the 4th importer of soybean oil from Brazil (3% of total), 62% of which being imported by the Netherlands (GRAPH 1.18). In 2004, China was the destination of 35% of Brazilian exports, followed by Iran (25%) and India (11%). (GRAPH 1.17). CHINA SOURCE: MDIC/AliceWeb IRAN EU-25 INDIA 2 004 2 003 2 002 2 001 2 000 1 999 1 998 1 997 1,1 1,0 0,9 0,8 0,7 0,6 0,5 0,4 0,3 0,2 0,1 0,0 1 996 M IL L IO N S O F T O N S GRAPH 1.17 – MAIN DESTINATION OF BRAZILIAN SOYBEAN OIL – 1996/2004 BANGLADESH SOURCE: MDIC/AliceWeb CHINA IRAN NETHERLANDS 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1,1 1,0 0,9 0,8 0,7 0,6 0,5 0,4 0,3 0,2 0,1 0,0 1991 M IL L IO N S O F T O N S GRAPH 1.18 – MAIN IMPORTING COUNTRIES OF BRAZILIAN SOYBEAN OIL – 1991/2004 INDIA MAIN WORLD SOYBEAN PROCESSORS The United States have the main processing plants of soybean in the world. China, Argentina e Brazil have increased their share in the world soybean crushing activities. Between 1990 e 2004 total volume of crushed soybean grew as follows: → US: 28 % → Brazil: 106% → Argentina: 257% → China: 551% (GRAPH 1.19) GRAPH 1.19 – MAJOR SOYBEAN PROCESSING COUNTRIES – 1991/2004 50 45 40 MILLIONS OF TONS 35 30 25 20 15 10 5 USA BRAZIL CHINA ARGENTINA 03/04 02/03 01/02 00/01 99/00 94/95 90/91 0 EU-25* SOURCE: USDA; NOTA: * From 90/91 to 98/99: EU-15. From 99/00: EU-25 2. DOMESTIC PRODUCTION ©2004 DEXT - Divisão de Extensão Tecnológica GROWTH OF BRAZILIAN SOYBEAN PRODUCTION In the 1970s and 1990s, soybean production grew significantly (GRAPH 2.1), due to: • World price increase in the 1970s. Expansion of agricultural frontier from the Southern states to Mid-West in the 1990s (GRAPH 2.2). • 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 MILLIONS OF TONS GRAPH 2.1 – BRAZILIAN PRODUCTION OF SOYBEAN GRAIN – 1952/2004 50 40 30 20 10 0 SOURCE: IBGE/PAM - LSPA_QSOJA 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 US$/TONS GRAPH 2.2 – EVOLUTION OF SOYBEAN GRAIN PRICES – 1957/2004 300 250 200 150 100 50 0 SOURCE: IPEADATA MAIN PRODUCING REGIONS The main soybean producing regions in Brazil are the South and Mid-West (MAP 2.1). The main producing states in these regions are: (MAP 2.2): • • South: Paraná and Rio Grande do Sul. Mid-West: Mato Grosso and Goiás. MAP 2.1 – SOYBEAN PRODUCTION, BY GEOGRAPHIC REGION – 2004 SOURCE: IBGE/SIDRA – Produção Agrícola Municipal (Municipal Agricultural Production) MAP 2.2 – PRODUCTION OF SOYBEAN IN THE BRAZILIAN STATES - 2004 FROM TO COL 500 5.000.000 1 5.000.001 6.000.000 2 6.000.001 10.000.000 3 10.000.001 12.500.000 4 12.500.001 15.000.000 5 SOURCE: IBGE/SIDRA – Produção Agrícola Municipal (Municipal Agricultural Production) SOYBEAN PRODUCTIVITY: A COMPARISON BETWEEN BRAZIL, US AND ARGENTINA Until the mid 1990s soybean yield in Brazil was significantly smaller than that of its main competitors (US and Argentina). In the late 1990s, Brazil caught up its the main competitors by reaching the same level of productivity. A drop occurred in the last two years is explained mainly by unfavourable weather conditions (GRAPH 2.3). GRAPH 2.3 – SOYBEAN PRODUCTIVITY: A COMPARISON BETWEEN BRAZIL, USA AND ARGENTINA– 1990/2005 T O N /H A 3,5 3,0 2,5 2,0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 1,5 USA SOURCE: USDA BRAZIL ARGENTINA SOYBEAN PRODUCTIVITY IN BRAZIL The level of productivity of soybean production in the Southern region oscillates more intensively than that of Mid-West region, due to crop failures mainly in the state of Rio Grande do Sul (GRAPH 2.4). Soybean yield has increased in Brazil throughout the years. Among the largest state producers, Mato Grosso has achieved the highest level, followed by Paraná and Goiás. In Rio Grande do Sul there is an intense oscillation in yield mainly due to unfavourable climate factors. GRAPH 2.4 – SOYBEAN PRODUCTIVITY, BY GEOGRAPHIC REGION – 1990/2004 4,0 3,5 TON/HA 3,0 2,5 2,0 1,5 1,0 0,5 SOUTH 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 0,0 MIDDLE WEST SOURCE: IBGE/SIDRA – Produção Agrícola Municipal (Municipal Agricultural Production) GRAPH 2.5 – SOYBEAN PRODUCTIVITY IN THE MAJOR BRAZILIAN STATES – 1990/2004 3,5 T O N /H A 3,0 2,5 2,0 1,5 1,0 PARANÁ MATO GROSSO 2003 2004 2001 2002 1999 2000 1997 1998 1996 1994 1995 1992 1993 1990 1991 0,5 RIO GRANDE DO SUL GOIÁS SOURCE: IBGE/SIDRA – Produção Agrícola Municipal (Municipal Agricultural Production) PRODUCTION OF SOYBEAN IN PARANÁ STATE In Paraná, the second biggest state soybean producer in Brazil, and the main subject of this investigation, the only area where soybean crops are insignificant is near the coast. Areas with high levels of productivity are concentrated in both the central region of Paraná and around Ponta Grossa. MAP 2.3 – SOYBEAN PRODUCTION IN THE REGIONS OF PARANÁ- 2004 From To Col. 0 100.000 1 100.001 500.000 2 500.001 1.000.000 3 1.000.001 1.500.000 4 1.500.001 2.000.000 5 2.000.001 2.200.000 6 SOURCE: IBGE/SIDRA – Produção Agrícola Municipal (Municipal Agricultural Production) PERFORMANCE OF THE PRODUCTION SYSTEM The price of land in Brazil, compared with other producing areas, is very low. However, the cost related to fertilisers is very high. PERFORMANCE OF THE PRODUCTION SYSTEM SOY PRODUCTION COST (US$/ha) USA Middle West 2003/2004 Brazil Mato Grosso 2003 Brazil Paraná 2003 Argentina Humid Pampas 2002 Seed 45,3 19,8 30,8 - Fertilizers 20,6 119,5 51,7 - Chemical Products 55,9 63,9 74 - Machines Operational/Repair 57,2 65,8 47,8 - Capital’s Interests 5,2 15,6 13,3 - Technical Assistance 3,3 12,9 16,9 - - 31,3 28 - 187,5 328,8 262,5 222,9 Depreciation of Machines and Equipments 126,1 156,6 93,3 47,2 Cost of Land 224,1 7,8 40,9 155,3 Taxes and Insurances 17,4 4,4 4,6 - 37 24,5 33,8 51,2 Total Fixed Cost 404,6 193,3 172,6 253,7 Total Production Cost 592,1 522,1 435,1 476,6 Productivity by hectares in kg 2910 3000 3000 3000 Total of Costs by Tons 203,5 174 145 158,8 SOY VARIABLE COSTS Others Total of the Variable Costs FIXED COSTS Return of Farm’s Investment SOURCE: CONAB and USDA FLOWCHART OF SOYBEAN HARVEST IN 2004 (MILLIONS OF TONS) SOURCE: IBGE, ABIOVE 3. STORAGE ©2004 DEXT - Divisão de Extensão Tecnológica BRAZILIAN STORAGE CAPACITY Production of grains has shown an intensive growth. (GRAPH 3.1). Storage capacity has not kept up with this trend. (GRAPH 3.1). Both facts result in storage problems with losses alongside the productive chain. GRAPH 3.1 – STATIC STORAGE CAPACITY VERSUS PRODUCTION OF GRAINS IN BRAZIL – 1991/2004 M IL L IO N S O F T O N S 120 110 100 90 80 70 60 STORAGE CAPACITY SOURCE: CONAB GRAIN PRODUCTION 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 50 STORAGE CAPACITY IN THE STATES OF PARANÁ, RIO GRANDE DO SUL AND MATO GROSSO There is a striking resemblance between Paraná and Brazil, with an increase of grain production superior to that of storage capacity (GRAPH 3.2). Rio Grande do Sul is an exception, not by the increasing storage capacity, but by ongoing harvest failures (GRAPH 3.3). Mato Grosso shows a stronger potential to face problems related to lack of storage facilities, given a high level of production growth (GRAPH 3.4). GRAPH 3.2 – STATIC STORAGE CAPACITY IN PARANÁ – 1991/2004 30 M IL L IO N S O F T O N S 25 20 15 10 5 GRAIN PRODUCTION SOURCE: CONAB STORAGE CAPACITY 2 0 04 2 0 03 2 0 02 2 0 01 2 0 00 1 9 99 1 9 98 1 9 97 1 9 96 1 9 95 1 9 94 1 9 93 1 9 92 1 9 91 0 GRAPH 3.3 – STATIC STORAGE CAPACITY IN RIO GRANDE DO SUL – 1991/2004 30 M IL L IO N S O F T O N S 25 20 15 10 5 GRAIN PRODUCTION SOURCE: CONAB STORAGE CAPACITY 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 0 GRAPH 3.4 – STATIC STORAGE CAPACITY IN MATO GROSSO DO SUL – 1991/2004 30 M IL L IO N S O F T O N S 25 20 15 10 5 GRAIN PRODUCTION SOURCE: CONAB STORAGE CAPACITY 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 0 STORAGE CAPACITY COMPARISON: BRAZIL, ARGENTINA AND USA Most of storage capacity in the US and Argentina is concentrated in the farms (TABLE 3.1). In Brazil, storage capacity is mainly concentrated in the hands of collecting agents (TABLE 3.1). As a consequence, Brazilian farmers dependent on trading companies. are more TABLE 3.1 – GRAINS STORAGE STRUCTURE IN BRAZIL, ARGENTINA AND USA , 2003 (% of the storage capacity in bulk ) STORAGE BRAZIL ARGENTINA USA FARM 5 20-30 50-60 COLLECTING (COLETORA) INTERMEDIARY 88 25 30 2 20 10 TERMINAL 5 10 10 NOT DISCRIMINATED - 10 - SOURCE: Ministério da Agricultura, Abastecimento e Reforma Agrária 4. PROCESSING ©2004 DEXT - Divisão de Extensão Tecnológica GROWTH OF SOYBEAN CRUSHING INSTALLED CAPACITY Installed capacity of processing grain industry has not followed the evolution of soybean production, as it is noticed in the period between 1977 and 2004 (GRAPH 4.1): • Processing installed capacity: 217% • Soybean production: 296% • Volume of soybean crushed: 237% GRAPH 4.1 – BRAZILIAN SOYBEAN INSTALLED CAPACITY, PRODUCED AMOUNT AND CRUSHED AMOUNT – 1977/2004 MILLIONS OF TONS 60 50 40 30 20 10 INSTALLED CAPACITY PRODUCED AMOUNT 2004 2003 2002 2001 1997 1995 1994 1993 1992 1989 1985 1984 1982 1977 0 CRUSHED AMOUNT SOURCE: ABIOVE, IBGE e USDA/Foreign Agricultural Service BRAZILIAN INSTALLED CAPACITY OF GRAIN PROCESSING Expansion of agricultural front in the 1990s led to dismantling some processing plants in Paraná and Rio Grande do Sul, and to deploying them to the states of Mato Grosso and Goiás (GRAPH 4.2). Paraná still has the biggest grain processing installed capacity (24,1% in 2004) followed by Mato Grosso (15,6%), Rio Grande do Sul (15%) Goiás (12,8%) and São Paulo (11,3%), as it shown in GRAPH 4.3. GRAPH 4.2 – GRAIN PROCESSING INSTALLED CAPACITY OF THE MAJOR BRAZILIAN STATES – 1992/2004 40 35 1000 T O N S/D A Y 30 25 20 15 10 5 PARANÁ SOURCE: ABIOVE MATO GROSSO RIO GRANDE DO SUL GOIÁS 2004 2003 2002 2001 1997 1995 1994 1993 1992 0 GRAPH 4.3 – STATES PARTICIPATION IN THE BRAZILIAN INSTALLED CAPACITY OF GRAIN PROCESSING: 2004 SÃO PAULO 11,3% GOIÁS 12,8% SOURCE: ABIOVE REMAINING 21,1% RIO GRANDE DO SUL 15,0% PARANÁ 24,1% MATO GROSSO 15,6% 5. TRANSPORTS ©2004 DEXT - Divisão de Extensão Tecnológica THE LOGISTICS SYSTEM OF SOYBEAN TRANSPORTATION IN BRAZIL Most of Brazilian production, including soybean, is transported by trucks. Despite a slight reduction on importance of road transportation in 1996 through 2001, no major change was detected in composition of the overall transport modal in the country (GRAPH 5.1). GRAPH 5.1 – EVOLUTION OF THE BRAZILIAN TRANSPORT MATRIX – 1996/2001 70 60 % 50 40 30 20 10 BY AIR BY RIVER SOURCE: GEIPOT e CNT PIPE LINE RAILWAY 2 0 01 2 0 00 1 9 99 1 9 98 1 9 97 1 9 96 0 HIGHWAY A COMPARISON BETWEEN THE TRANSPORT MATRIX AND THE TERRITORIAL EXTENSION Generally, countries with large territorial extension use more frequently railway modal (GRAPH 5.2): • • Russia: 79% Canada: 43% Australia: 40% United States: 41% In Brazil this modal represents only 21%. • • GRAPH 5.2 – TRANSPORT MATRIX AND TERRITORIAL EXTENSION - 2003 RAILWAY HIGHWAY BY RIVER TERRITORIAL EXTENSION - MILLIONS OF KM2 MEXICO MEXICO BRAZIL BRAZIL CHINA CHINA US A US A AUSTRALIA AUSTRALIA CANADA CANADA RUSS IA RUS SIA 0% 20% 40% 60% 80% 100% 0,0 SOURCE: ANTT, análise Trevisan (Trevisan analysis) 5,0 10,0 15,0 20,0 THE BRAZILIAN SOYBEAN TRANSPORT MATRIX The privatisation of railway network, in the mid 1990s, gave rise to investments in this sector, causing it to increase its share to 45,5% of the whole transport matrix for soybean. The importance of roads had a reduction of 8% in the same period. River transportation had its importance in the transport matrix doubled from 1998 to 2000. HIGHWAY RAILWAY 2000 1999 90 80 70 60 50 40 30 20 10 0 1998 % GRAPH 5.2 – GROWTH OF BRAZILIAN SOYBEAN TRANSPORT MATRIX – 1998/2000 BY RIVER SOURCE: Ministério dos Transportes e ANTT (Ministry of Transports and ANTT) MAJOR SOYBEAN TRANSPORTING ROUTES The main routes of transportation are (MAP 5.1): 1º) Centre-North-Northeast → harbour of Ponta da Madeira and Itacoatiara. 2º) Centre-South-Southeast: the main route in the country (56% of total transported) → harbour of Santos and Paranaguá (MAP 5.2). 3º) South → harbour of São Francisco do Sul and Rio Grande. 4º) Southeast-Northeast → harbour of Vitória and Ponta da Madeira. MAP 5.1 – SOYBEAN TRANSPORTING ROUTES SOURCE: MAFIOLETTI (2000) MAP 5.2 – MAJOR SOYBEAN TRANSPORTING ROUTES Brazilian Soy Exports in 2004 HARBOR Itacoatiara São Luís Santarém Porto Velho Petrolina Salvador Cuiabá Rondon Highway Estrada Fluvial Route Hidrovia Railway Vitória Campo Grande Ferrovia Santos Paranaguá São Fco. do Sul Rio Grande SOURCE: CBOT (2005) 1.000 tons % Santos 5.629 29,3% Paranaguá 5.135 26,7% Rio Grande 2.313 12,0% Vitória 2.203 11,5% S. Luis 1.163 6,0% S. Francisco do Sul 1.135 5,9% Itacoatiara 959 5,0% Santarém 456 2,4% 19.237 100% Total Brazil MAJOR SOYBEAN EXPORTING HARBOURS UNTIL 2003 Until 2003 the three main ports through which soybean has been exported were: 1º) Paranaguá (Paraná): 10,7 million tons. 2º) Santos (São Paulo): 7,7 million tons. 3º) Rio Grande (Rio Grande do Sul): 3,9 million tons. MAP 5.3 – PRODUCTION AND MAJOR EXPORTING HARBOURS OF SOYBEAN – 2002/2003 SOURCE: Embrapa MAJOR EXPORTING HARBOURS OF SOYBEAN GRAIN: 2004 After 2004 Santos has become the main port exporting soybean grain, followed by Paranaguá e Rio Grande (GRAPH 5.3). Rio Grande port lost ground in 2004 due to harvest failure. Vitória (Espírito Santo) has its share in the exportation of soybean grain increased after the expansion of agricultural frontier. GRAPH 5.3 – GROWTH OF THE AMOUNT OF SOYBEAN GRAIN EXPORTED, BY HARBOUR – 1994/2004 7 M ILLIO NS O F TO N S 6 5 4 3 2 1 PARANAGUÁ RIO GRANDE VITÓRIA SANTOS SÃO LUIZ SÃO FRANCISCO DO SUL SOURCE: ANEC – National Association of the Cereals Exporters 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 0 MAJOR SOYBEAN MEAL EXPORTING HARBOURS There is a downward trend in the exportation of soybean meal through the ports of Paranaguá and Rio Grande. On the other hand, Santos and Vitória show an upward trend, whereas São Francisco shows a stable trend in the exportation soybean meal in the same period. GRAPH 5.4 – GROWTH OF THE AMOUNT EXPORTED OF SOYBEAN MEAL, BY HARBOUR – 1994/2004 8 M IL L IO N S O F T O N S 7 6 5 4 3 2 1 PARANAGUÁ RIO GRANDE SÃO FRANCISCO DO SUL SANTOS VITÓRIA SOURCE: ANEC – National Association of the Cereals Exporters 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 0 MAJOR SOYBEAN OIL EXPORTING HARBOURS The main ports of soybean oil exports are Paranaguá, Rio Grande and São Francisco do Sul. From 1994 to 2000, these ports showed a downward trend in the soybean oil exports, except São Francisco do Sul, whose trend was stable. From 2001 onward, there has been a strong growth in the exports of soybean soil through Paranaguá. GRAPH 2.5 – GROWTH OF AMOUNT EXPORTED OF SOYBEAN OIL, BY HARBOUR – 1994/2004 1,6 M ILLIO NS O F TO NS 1,4 1,2 1,0 0,8 0,6 0,4 0,2 PARANAGUÁ RIO GRANDE SÃO FRANCISCO DO SUL SOURCE: ANEC – National Association of the Cereals Exporters 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 0,0 6. LOSSES IN THE PRODUCTIVE CHAIN ©2004 DEXT - Divisão de Extensão Tecnológica LOSSES IN THE PRODUCTIVE CHAIN The main losses along the productive chain are: • Losses before the harvest. • Losses after harvest. LOSSES FROM SOWING TO HARVEST The main factors causing losses before the harvest are: • Abiotic adversities, mainly climatic; Biotic adversities, mainly caused by crop diseases and insects; Economic factors such as price reduction, so that harvest becomes not worthwhile. • • MILLIONS OF TONS GRAPH 6.1 – SOYBEAN PRODUCTION UNTIL THE HARVEST - POTENCIAL AND ACTUAL: BRAZIL, 1996 – 2002 50 45 40 35 30 25 20 15 10 5 0 1996 1997 1998 1999 2000 BRAZIL POTENTIAL SOURCE: IBGE (2004) ACTUAL 2001 2002 LOSSES FROM SOWING TO HARVEST Losses in Brazil, from sowing to reaping, occur mainly in Rio Grande do Sul (GRAPHs 6.2 e 6.3). GRAPH 6.2 – SOYBEAN PRODUCTION UNTIL THE HARVEST: POTENCIAL AND ACTUAL: MATO GROSSO, PARANÁ AND RIO GRANDE DO SUL, 1996 – 2002 14 12 8 6 4 2 0 1996 1997 1998 1999 2000 2001 2002 1996 1997 1998 1999 2000 2001 2002 1996 1997 1998 1999 2000 2001 2002 MILLIONS OF TONS 10 Paraná Rio Grande do Sul POTENTIAL SOURCE: IBGE (2004) ACTUAL Mato Grosso GRAPH 6.3 – SOYBEAN INDEX OF LOSSES FROM SOWING TO HARVEST: BRAZIL, MATO GROSSO, PARANÁ AND RIO GRANDE DO SUL STATES, 1996 – 2002 INDEX (%) 25 20 15 10 5 1996 1997 1998 1999 2000 2001 2002 1996 1997 1998 1999 2000 2001 2002 1996 1997 1998 1999 2000 2001 2002 1996 1997 1998 1999 2000 2001 2002 0 Brazil SOURCE: IBGE (2004) Paraná Rio Grande do Sul Mato Grosso POST-HARVEST LOSSES The main factors explaining losses after harvest are: • Bad state of transporting infrastructure. • Storage problems, both qualitative and quantitative. GRAPH 6.4 - POST-HARVEST INDEX OF LOSSES: BRAZIL, 1997-2003 POST-HARVEST INDEX OF LOSSES (%) 8 7 6 5 4 3 2 1 0 1997 1998 1999 2000 Brazil SOURCE: IBGE (2004) 2001 2002 2003 POST-HARVEST LOSSES Costs resulting from losses, together with freight, cause a direct impact on farming yield. Per ton cost in Mato Grosso is lower than that of US Mid-West, as it is its yield. TABLE 6.1 – YIELD OF FARMING ACTIVITY IN US$/TON REGION SALE PRICE PRODUCTION COST GROSS PROFIT MARGIN Illinois - USA 342,0 203,5 40% Mato Grosso - BRA 213,0 174,0 18% Paraná - BRA 238,0 145,0 39% Cordoba - ARG 244,0 158,8 34% SOURCE: TAVARES (2004) POST-HARVEST LOSSES AND TRANSPORT COSTS Infrastructure of transport has been deeply affected by problems of deficiency, low quality and imbalance. Besides big losses post harvest, Brazil has on the average the higher cost of transport from farm gate to the ports. (TABLE 6.2); On the average, Brazil has the highest port expenses. (TABLE 6.2). TABLE 6.2 – LOGISTICAL COST OF SOYBEAN GRAIN EXPORTATION (2003 – US$/Ton) DESCRIPTION BRAZIL USA ARGENTINA Price in the Harbour 216 216 216 Freight from the fields to the Harbour -35 -15 -14 Shipment expenses -6 -3 -3 Price paid to farmers 175 198 199 SOURCE: ANUTT (2005) 7. CONCLUSIONS ©2004 DEXT - Divisão de Extensão Tecnológica CONCLUSIONS Brazil has had an average increase of 15% per year in the exportation of the soybean complex since the beginning of the 90s, achieving a position of leadership in the international market. The European Union is the main importer of Brazilian soybean grain and soybean meal. However, China’s imports of soybean grain from Brazil has grown considerably, around 76,5 % per year, since 1996. CONCLUSIONS The outset of soybean production in Brazil was in the beginning of the 1970s, in the Southern region. During the 1990s, soybean production was extended to the Mid-West of Brazil due to technical improvements (new seeds). The expansion of agriculture to a larger area implied in a significant increase of productivity of soybean. Nevertheless, the larger distance from the ports compared to the Southern region, the country’s precarious infrastructure of transport and storage, have significantly raised the costs associated with the Brazilian harvest transportation. CONCLUSIONS The storage capacity has not kept pace with the growth of grain production, causing potential losses throughout the productive chain. Despite the fact that the highways are the major mode of transport soybean, railways have increased their participation in soybean transportation, mostly because of investments made in the network after the privatization process. CONCLUSIONS The main ports through which soybean is exported ports are located in the Southeastern and Southern regions of Brazil, despite the fact that the main destinations of soybean are geographically closer to the Northern region. This is due to the lack of an adequate logistics infrastructure in this region, the less developed region of Brazil. Weather change is a major cause of losses in the harvest activity in the Southern Region of the country, whereas post-harvest losses are mainly due to the precariousness of transport infrastructure and ports. Therefore, larger investments in these sectors are strongly required. CONCLUSIONS The infrastructure’s precariousness associated to an inefficient transportation and storage of Brazilian soybean – mainly a lack of storage capacity – has strong impacts on the costs of implementing alternative systems that guarantee a large scale coexistence of conventional and genetically modified cultures. As the genetically modified organisms have spread out across the country, the implementation of a large scale traceability system can be constrained by the need of large investments in infrastructure. 8. REFERENCES ©2004 DEXT - Divisão de Extensão Tecnológica REFERENCES Agência Nacional de Transportes Terrestres (ANTT). Transporte terrestre: números do setor. Disponível em: <http://www.antt.gov.br/destaques/ANTTem Numeros20051010.pdf> Acesso em: 03 set. 2005. Associação Brasileira das Indústrias de Óleos Vegetais (ABIOVE). Capacidade instalada da indústria de óleos vegetais. Disponível em: <http://www.abiove.com.br> Acesso em: 10 set. 2005. Associação Nacional dos Exportadores de Cereais (ANEC). Estatísticas. Disponível em:<http://www.anec.com.br/estatisticas> Acesso em: 19 set. 2005. Associação Nacional dos Usuários do Transporte de Cargas (ANUT). Transporte: desafio ao crescimento do agronegócio brasileiro. Disponível em: <http://www.anut.org.br/trabalhos.asp> Acesso em: 03 set. 2005. BDO Trevisan. Infraestrutura de transporte no Brasil: considerações gerais sobre o panorama atual e proposta de ações imediatas. São Paulo, II Fórum Fiesp de Logística, junho, 2005. 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Instituto Brasileiro de Geografia e Estatística (IBGE), 2003. Produção Agrícola Municipal, Culturas Temporárias e Permanentes. Brasil: Instituto Brasileiro de Geografia e Estatística, Volume 30: pp. 1-91. REFERENCES Maffioletti, Robson. 2000. Formação dos preços na cadeia agroindustrial da soja na década de 90. Dissertação de Mestrado, Escola Superior de Agricultura Luiz de Queiroz, Universidade de São Paulo, Piracicaba. Disponível em: <http://www.teses.usp.br/teses> Acesso em: 28 set. 2005. Martinelli, Orlando; Souza, João Marcos, 2003. Relatorio Setorial Preliminar: Armazenagem Agrícola. Finep: <http://www.finep.gov.br/PortalDPP/relatorio_ setorial> Acesso em: 30 set. 2005. Ministério do Desenvolvimento, Indústria e Comércio Exterior (MIDC). Estatísticas sobre exportações brasileiras. Disponível em: <http://aliceweb.desenvolvimento.gov.br> Acesso em: 08 set. 2005. Ministério dos Transportes. Anuário Estatístico. <http://www.transportes.gov.br> Acesso em: 21 ago. 2005. Tavares, Carlos Eduardo Cruz, 2004. Fatores críticos à competitividade da soja no Paraná e Mato Grosso. Disponível em: <http://www.conab.gov.br> Acesso em: 30 set. 2005. United States Department of Agriculture (USDA). Production, Supply and Distribution <http://www.fas.usda.gov/psd/psdselection.asp> Acesso em: 21 ago. 2005. THE BRAZILIAN SOY COMPLEX DANIEL BREHN* DAYANI CRIS DE AQUINO* EVÂNIO DO NASCIMENTO FELIPPE* LUCIANO NAKABASHI** * Master Degree Students in the Economic Development Graduation Program at Federal University of Paraná ** PhD in Economics Supervisors: PhD Armando Dalla Costa; PhD Nilson de Paula; PhD Roseli Santos; PhD Victor Pelaez. ©2004 DEXT - Divisão de Extensão Tecnológica INSTITUTO DE TECNOLOGIA DO PARANÁ DEXT - Divisão de Extensão Tecnológica R. Professor Algacyr Munhoz Maeder, 3775 CEP 81350-010 - Curitiba - PR Phone: 5541 3316-3053 - Fax: 5541 3346-2872 e-mail: [email protected] ©2004 DEXT - Divisão de Extensão Tecnológica