Brazil P&I Club: Inadequate storage can damage grain cargoes

According to forecasts from the National Supply Company (Conab) there is a shortage of warehouses for 118.5 million tons of grains in Brazil, forcing producers to store products like soybeans and corn in silo-bags or even in the open air, the Brazil P&I Club informs in a recent circular.

Data from the Sectoral Chamber of Grain Storage Equipment of the Brazilian Association of Machinery and Equipment Industry (Abimaq), shows that the situation has been worsening year by year, especially in the face of successive records in Brazilian agribusiness production.

In the last 15, 20 years, until 2022, Brazilian production grew by an average of 10 million tons per year. What we have today is a deficit that jumped from 83 million tons to 118.5 million tones.

..said the president of the Abimaq sectoral chamber, Paulo Bertollini.

Credit: Brazil P&I

Loss of quality

According to Brazil P&I Club, as a consequence of the limited availability of silos, a portion of the grains produced in Brazil, is exposed to moisture and contamination.

As informed, given the long distances traveled in shipping lines, there is a risk of product quality loss, in addition to complaints from buyers.

Loss prevention 

Cargo samples are taken to check for moisture and quality, thus providing evidence that can help with potential claims at the discharge port, regarding the loading conditions of the cargo, and doubts about the storage condition of the grains in the holds, as well as damage to the cargo during the shipping period.

Furthermore, the problem of inadequate grain storage also becomes a decisive factor for the commercialization of commodities. There is an estimated increase of 2.7% in planted area and a further 10% in sector productivity.

According to Conab, corn production is expected to reach a record of around 127.7 tons this year. This represents a 12.9% increase compared to the previous crop.

Abimaq estimated that investments of R$15 billion per year are necessary in storage to prevent the deficit from increasing. However, the Program for the Construction and Expansion of Warehouses (PCA) announced with the Agriculture and Livestock Ministry’s (Mapa) Safra Plan in June, provides only R$6.6 billion in credit lines.