Recently released market study: Brazil Shipping Report Q3 2011

New Transportation research report from Business Monitor International is now available from Fast Market Research
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* Port
* Santos
* Terminal
* Brazilian
* Investment
* Congestion
* Cosan
* Sugar
* Capitalise
* Teu

* Transportation
* Automotive
* Shipping

* Massachusetts - US

June 9, 2011 - PRLog -- In Q311 BMI believes that growth in the Brazilian port sector will continue on the back of exports to Asia, particularly China, and rising domestic consumer spending, which should see increased demand for containerised goods. The pace of growth at Brazilian ports has been rapid and BMI notes that Brazil's ports have not yet developed the infrastructure needed to handle increasing throughput levels. Its ports are poor by international standards, ranking 126th out of the 133 nations surveyed in the World Economic Forum's 2010 Global Competitiveness Report. As such, we expect to see more investment in infrastructure, both public and private, as ports seek to deal with growing traffic and to capitalise on increasing trade opportunities.

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Headline Industry Data

* 2011 port of Santos tonnage throughput +12% in 2011 following growth of 15% in 2010.
 * 2011 port of Itajai tonnage throughput +18% in 2011 following growth of 63% in 2010.
 *  2011 port of Santos TEU throughput +12% in 2011 following projected growth of 15% in 2010.
 *  2011 port of Itajai TEU throughput +8% in 2011 following growth of 61% in 2010.

Key Industry Trends

Antwerp Signs Cooperation MoU With Brazil's CODESA: The trend of major European ports offering their expertise to ports in emerging states continues with Port of Antwerp International (PAI), a subsidiary of the Antwerp Port Authority (APA), signing a memorandum of understanding (MoU) with Brazil's Companhia Docas do Espirito Santo (CODESA), the port of Vitoria authority. BMI believes the deal will prove beneficial to both parties, as the port of Vitoria will benefit from the experience of Europe's second-largest port operator and PAI will gain a foothold in what is one of the Americas' most important and high-potential port markets.

Under the agreement, the two parties declared their intention to collaborate as strategic partners on the development of a new deep-sea container terminal in the port of Vitoria, in the state of Espirito Santo. In the first phase the collaboration will focus on consultancy; in subsequent phases a deeper involvement will be investigated in terms of investment, training and development of commercial relations. The new container port should be operational within three to five years. The MoU was signed by Angelo Baptista, CEO of CODESA, and by Marc Van Peel and Yannick Dufraimont, respectively chairman and CEO of PAI. Future Looks Bright For Itajai As Brazilian Consumers Keep Spending: BMI believes the start of dredging works at the Brazilian port of Itajai is a positive step for the port. The announcement that the dredging work is to be followed by an investment of BRL$135mn means the port should be well placed to take advantage of Brazil's growing consumer demand.

The National Dredging Program (PND), funded by the Brazilian Government's Growth Acceleration Program (PAC), is funding the deepening of Itajai's approach channel and turning circle from 11m to 14m. According to Itajai Port Authority Superintendent Antonio Ayres dos Santos, each centimetre gained in depth will allow an extra 60 tons of cargo per vessel. The project will enable the port to receive Post-Panamax ships vxfng at certain times.

The deepening of access channels and basin was due to begin last year, but was pushed back because of delays in the bidding process. The work is being performed by the Belgian company Jan de Nul and should be finished within six months. We caution, however, that the arrival of larger vessels at the port will bring into focus the need for bigger and better landside infrastructure.

Risks To Outlook

Potential downside risks to our outlook include a possibility of reduced Chinese demand in 2011. Our Asia Country Risk team predicts that China's real GDP growth will drop from 10.2% in 2010 to 8.3% in 2011. This will have a knock-on effect on its demand for raw materials. As China replaced the US in 2009 as the biggest importer of Brazilian products, any slowdown in Chinese spending will have a negative effect on Brazil's port sector.

A second downside risk is the possibility that Brazil will not be able to improve its port infrastructure in order to keep up with global demand for its main exports. Brazil supplies 54% of the world's sugar and it is currently vying with Australia to become China's main supplier of iron ore. Infrastructure deficits limit expansion and we believe that if the country does not improve efficiency and capacity there is a possibility that importers will look elsewhere for their supplies. We acknowledge, however, that importers are traditionally repeat customers and supply contracts take some time to develop, therefore this is a mid-term rather than short-term risk.

The main upside risk to our forecast comes from growing Brazilian consumer demand. The Brazilian economy proved itself to be particularly resilient in the face of the global downturn, and it returned to strong growth in 2010. This rebound has demonstrated the resilience of the Brazilian consumer and supports our view that strong private consumption, supported by the rising affluence of middle class consumers and the increasingly positive picture for Brazil's large low-income population, will drive the country's growth. This paints a positive picture for the sector, as growing imports will result in increased throughput at Brazilian ports.About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.  BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at

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Tags:Port, Santos, Terminal, Brazilian, Investment, Congestion, Cosan, Sugar, Capitalise, Teu
Industry:Transportation, Automotive, Shipping
Location:Massachusetts - United States
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