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Brazil Shipping Report Q4 2013 - New Study Released

Fast Market Research recommends "Brazil Shipping Report Q4 2013" from Business Monitor International, now available


Boston, MA -- (SBWIRE) -- 10/16/2013 -- BMI's outlook for Brazilian ports remains broadly positive. However, it should be noted that there are downside risks to our Brazil port forecasts in the coming years. With a raft of disappointing data in recent months pointing to a still weak economic recovery, we now anticipate a more modest rebound in growth this year. We have revised down our 2013 real GDP growth forecast to 2.6%, from 3.3% previously, as economic activity data remains weak.

Brazilian exports have been hit hard by delays at major commodity exporting port Santos in the first few months of 2013, as well as weakening iron ore prices. While we believe that strong soy, coffee and corn harvests will feed through to a pick-up in export growth in the coming months, we see no major upside for Brazil's mining exports this year, as prices remain under pressure from weakening Chinese demand. As a result, we forecast exports to contract by 3.9% in real terms this year, down from a 0.3% contraction previously, putting downside pressure on port volumes.

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Meanwhile, imports remain in a solid uptrend, a dynamic we expect to continue in the coming months given their strong correlation with strengthening industrial production, informing our forecast for real import growth of 4.8% this year, up from 0.2% in 2012, which should provide a welcome boost to shipping volumes.

As well as economic imbalances, we remain concerned about ongoing labour unrest at the country's ports. After a February strike created delays at some of Brazil's largest public ports on the back of government plans to modernise the sector, we highlight potential for further industrial action to create massive disruptions at ports over the coming months. Given that President Dilma Rousseff's government has taken a hard line against union demands in recent months and appears to be serious about port modernisation, we expect that several months of intermittent strike action is likely.

Key Industry Data

- Total tonnage throughput at the Port of Santos to grow 3.78% in 2013 to reach 108mn tonnes. To 2017, we predict average annual growth of 7%.
- Container throughput at Santos to grow 4.5% to reach 3.3mn twenty-foot equivalent units (TEUs) in 2013, with average annual growth of 6% during our forecast period.

Key Industry Trends

Strike Threat Persists: The Brazilian ports sector remains at risk of industrial action, and with this comes risk to BMI's throughput growth forecasts for the country's maritime facilities in 2013 and beyond. The sector's performance is not only threatened by the more general nationwide strikes - these started in June with protests against a hike in public transport fees before escalating into a more general demonstration of malcontentedness against the Rousseff administration - but also by specific grievances particular to the industry itself, as the government presses ahead with its privatisation.

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