Bunge and Cargill seek lower Panama Canal tariffs in bid to change grain trading patterns

Bunge and Cargill seek lower Panama Canal tariffs in bid to change grain trading patterns

The world’s largest grain traders are putting the squeeze on the Panama Canal Authority. Reuters is reporting that Brazilian port operators, including ones operated by Bunge and Cargill, are seeking to get the canal authorities to slash tariffs in order to get their shipments to key client, China, cheaper.

The grain group claim that currently shipping grains from Brazil’s northern ports via the Cape of Good Hope is almost $206,000 cheaper on a per-ship basis than using the canal, despite being up to five days longer.

The private port operators association, ATP, also includes pulp and paper producer Suzano Papel e Celulose.

ATP officials told Reuters the tariff proposal must be made by the Brazil’s agriculture ministry to the country’s foreign affairs ministry, which would be responsible for negotiating the terms with Panamanian authorities.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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1 Comment

  1. Avatar
    Geir-Eilif Kalhagen
    April 4, 2019 at 4:23 am

    I am sure this math is directly correlated to operational costs assigned to the voyage. If these were the only costs then one would assume that the long way around would be fine. The reality is of course that there is a cumulative lost opportunity cost given the 5 extra days per voyage and as well the increased maintenance cost associated with PM.