Loading soya beans in Brazil Practical Guidance 5. Soya bean quantification ............... 25 Content 5.1. Customs quantification ................... 25 5.2. Commercial quantification ............. 25 5.3. Shortage allowance ......................... 26 6. Soya bean loading & stowage ....... 27 6.1. Statutory requirements .................. 27 6.1.1. for the vessel ......................................... 27 6.1.2. for the cargo .......................................... 27 6.2. Allocation of liabilities..................... 27 6.2.1. shipper's liability .................................... 27 6.2.2. carrier's liability ..................................... 28 Foreword .............................................. 3 6.2.3. Port operator's liability.......................... 28 1. Background ...................................... 4 6.3. Loading operation ........................... 28 1.1. History of the soya in Brazil.............. 4 6.3.1. Cargo information ................................. 28 1.2. Cultivation .......................................... 4 6.3.2. Loading and stowage plan................... 29 6.3.3. Loading supervision ............................. 29 1.3. Environmental concerns ................... 6 6.3.4. Cargo trimming ..................................... 30 2. Soya bean production ...................... 8 6.3.5. Cargo fumigation .................................. 31 2.1. National production .......................... 8 7. Cargo risks ...................................... 32 2.2. Domestic consumption & stocks ..... 9 7.1. Inherent vice .................................... 32 3. Soya bean exports ......................... 10 7.1.1. Moisture content & temperature......... 32 7.1.2. Climatological factors ........................... 33 3.1. Export performance ........................ 10 3.1.1. Main exporting states ........................... 11 7.2. Cargo damage ................................. 36 3.1.2. Main exporting ports ............................ 11 7.2.1. Wetness ................................................. 36 3.1.3. Main buying countries.......................... 12 7.2.2. Contamination ....................................... 36 7.2.3. mould and self-heating......................... 37 3.2. Transport corridors ......................... 12 3.2.1. South Corridor ...................................... 12 7.3. Cargo shortage ................................ 37 3.2.2. Southeast Corridor ............................... 12 7.3.1. clausing of M/Rs & Bs/L ....................... 37 3.2.3. Northeast Corridor ............................... 13 7.3.2. Shore x ship figures ............................. 38 3.2.4. North Corridor ....................................... 13 8. Loss prevention issues .................. 39 3.3. Export routes ................................... 14 8.1. Cargo weather protection .............. 39 3.4. Brazilian port system ...................... 15 8.1.1. Cargo holds ........................................... 39 3.4.1. Southern Arc ports ............................... 16 8.1.2. Hatch covers ......................................... 40 3.4.2. Northern Arc ports ............................... 16 8.2. Cargo condition ............................... 41 3.5. Soya bean port handling ................. 17 8.2.1. Cargo sampling ..................................... 41 3.5.1. Exports by port ..................................... 17 8.2.2. Moisture & temperature monitoring ... 43 3.5.2. Exports by loading facility .................... 18 8.3. Cargo quantity ................................. 44 3.5.3. Exports by destination ......................... 20 8.3.1. Draft displacement survey ................... 44 4. Soya bean grading ......................... 21 8.3.2. Sealing of cargo holds ......................... 44 4.1. Legal framework.............................. 21 8.4. Cargo ventilation ............................. 45 4.2. Official grading ................................ 21 9. Conclusion ...................................... 46 4.3. Commercial grading ....................... 23 4.4. Official sampling method ................ 24 Disclaimer This publication aims to provide a source of reference to the benefit of our clients and associates. Whilst we have taken every care to ensure the information provided is correct and up to date, we give no warranty or representations whatsoever about the accuracy, reliability and suitability of the data for the purposes to which it is applied. We accept no liability whatsoever ll. any loss or damage, direct or indirect, arising out of or in connection with the use and reliance on the information provided herein. This publication is not and should not be used as a substitute for legal advice. It is intended to be comprehensive or replace existing rules and guidelines issued by international and national health, maritime, port and customs authorities and liability insurers © Proinde 2020. All rights reserved. Loading soya beans in Brazil – Practical Guidance Page 2 Foreword To assist our clients and associates in understanding better how the soya bean has become a vital commodity for the agribusiness and the domestic economy, we prepared this guide, which is divided into two parts for ease of consultation. First, we quickly look at the history and importance of the versatile oilseed, its cultivation and production, and the journey of the beans from the fields in the countryside to the ports along the coast and in the Amazon, and from there to the World's most consumed oilseed, soya bean is other side of the globe. Then, we briefly explain the also Brazil's most cultivated and profitable crop national grading standards and the framework for and the main item on the export basket. Second the quantification, loading and stowage of grain only to iron ore in volume, soya bean exports cargoes, as well as the liabilities involved. increased almost two-fold the previous decade Based on our hands-on experience, and due to expansion of harvested area and use of following the guidelines of international authorities advanced agricultural technology that boosted the and leading P&I clubs, in this publication we also productivity on the fields across the tropics. provide practical advice on main cargo risks in the The tariff dispute between the United States face of local factors, and on best practices for and China also contributed to Brazil becoming the safely loading and carrying the precious beans largest producer and exporter of the annual across the seas. legume, followed by the USA and Argentina. Long- We hope this guide will be a useful source of term investments in land transport and port reference and practical information, and we infrastructure, an abundance of arable land, and welcome your comments and suggestions for high-tech farming lend the conditions to corrections and improvements. We will do our best consolidate Brazil's position as the leading to keep an updated version of this publication supplier of the oilseed in years to come. available for free download on our website. Although it has been half a century since soya bean exports kicked in, it was only recently that China surpassed Europe as the top destination for REPRESENTAÇÕES PROINDE LTDA. the ever-larger Brazilian shipments – and that the November 2020 risks associated with the sea carriage of this commodity over longer distances expanded. Transit time to Asia is more than twice that to most European ports, and soya bean is a living cargo with an inherent tendency to decay over time, as dictated by its moisture content and temperature. In recent years, sea carriers and P&I insurers have been faced with increasingly frequent claims or demands for security due to cargo deterioration during the voyage. www.proinde.com.br Loading soya beans in Brazil – Practical Guidance Page 3 1. Background 1.1. History of the soya in Brazil The first seeds of soya beans [Glycine max (L.)] arrived from the United States to the state of Bahia in 1882, but the legume of the Fabacea famility did not adapt well to the low latitudes and high temperatures of Northeast Brazil. From 1890, cultivars were brought to the southernmost state of Rio Grande do Sul in the 30th parallel south. Eventually, it was only from 1908, after the arrival of the first waves of Japanese immigrants bringing seeds through the port of Santos, that soya beans started to be cultivated for human consumption in Brazil1. Soya bean plantations were initially grown in the states of Rio Grande do Sul and Paraná and, to a lesser extent, areas in and around the states of São Paulo and Minas Gerais. From the 1960s, soya bean cultivars were enhanced and adapted to the lands of Central-West regions. Soya bean fields then expanded to the states of Mato Grosso, Mato Grosso do Sul and Goiás, which together account for nearly half of today's national production with potential for a substantial increase. Picture 1: Soya bean plantation in the Cerrado region, Central-West Brazil. Source: pexels.com From the mid-1970s, the Brazilian Agricultural Research Corporation (Embrapa)2 joined forces with growers, traders and researchers in the private sector. They carried out extensive researches and development works to improve yield, flavour, proteinic content and resistance to diseases. Today, soya bean crops are grown sustainably in nineteen of the 26 states of the federation and the Federal District. 1.2. Cultivation Soya bean plantations of varying sizes are scattered all over the country, with larger fields located in the central and southern parts