A director of Brazilian rail and port terminal operator VLI said the company's shipping business will face challenges in 2024 due to the expected reduction in corn and soybean harvests in northern Brazil.
VLI transports soybeans, soybean meal and corn, which accounted for more than 37% of its total freight volume last year. VLI also transports fertilizers, sugar, fuel, forest products, steel, and minerals.
Carolina Hernandez, VLI's executive director of commercial, said that cereals should account for about 40% of VLI's total freight traffic in 2023, as Brazil's soybean and corn production reached record highs this year.
She declined to give an estimate of VLI's total cargo volume in 2023. She said the target for 2022 was 58 million tonnes.
Our business strategy is to maintain the volume of rail traffic," the Colombian executive said. She has been working in Brazil for 17 years and started her tenure at VLI this year.
But maintaining a steady volume of shipments is not an easy task.
With the emergence of the El Nio climatic phenomenon, rainfall is expected to decrease in the province of Matopiba, Brazil's new agricultural frontier, while the central and western states of Mato Grosso and Goiás will also suffer from drought and high temperatures, affecting soybean and corn production.
Hernandez said she expects VLI's corn harvest to fall by about 15 percent in the main region where it operates in northern Brazil.
For soybeans planted near the Matopiba region in the north, the yield drop should be less than 5 percent, she said.
People are more worried about corn than about soybeans," she said. "In El Niño years, the harvest in Matopiba was affected ......”