Cecafé expressed its concern on the bill that eliminates the guarantee of affordability of the ports in Brazil
December 27 - 2024
Coffee Geography Magazine
The Brazilian Coffee Exporters Council (Cecafé) participated in a hearing with the Minister of Ports and Airports, Silvio Costa Filho, at the Ministry's headquarters in Brasília (DF). The meeting was requested by the CEO of the Brazilian Association of Users of Transport and Logistics Ports (Logística Brasil), André Seixas, to discuss the draft bill presented by the Committee of Jurists for Legal Review of the Operation of Ports and Port Facilities (CEPORTOS), of the Chamber of Deputies.
Logística Brasil and Cecafé expressed to the minister their concerns regarding the report presented, especially in relation to the suppression of the guarantee of affordability, which will harm port users by removing the guarantee that there will be no abusive prices, which will consequently impact the competitiveness of the national economy, especially shippers, exporters, importers and end consumers of products that pass through the ports.
“The proposal to eliminate the guarantee of affordability is unacceptable and impacts the possibility of the State, through regulation, providing competitiveness to our products, causing great economic and financial losses to Brazil and, even, potentially preventing the country from joining the Organization for Economic Cooperation and Development ( OECD ), which guarantees the country has a seal of viability for business and investments”, points out Eduardo Heron, technical director of Cecafé, who represented the entity at the hearing.
He explains that this scenario occurs because the draft bill proposes unlimited prices for cargo, with the end of the guarantee of reasonable prices and rates for users, a vital condition for adequate service in the future law. “Even more worrying is the fact that the report, contrary to logic, proposes the guarantee of reasonable rates for the rates paid by port operators and shipowners, that is, they will have prices and rates with limits, which violates the equality for the guarantee of reasonable rates between them and the user”, he criticizes.
Heron reminded the minister that the scenario for Brazilian exporters is already critical due to logistical bottlenecks in the country's ports, which have directly impacted shipments. “In our coffee example alone, despite the record export of 4.9 million bags of the product in October, the multiple delays and constant changes in the scale of export vessels, in addition to frequent cargo rollovers, caused the country to accumulate 1.7 million bags, or 5,203 containers, not shipped in 2024 until that month, according to data from the Detention Zero Bulletin, which we developed in partnership with ElloX”, he reveals.
The director of Cecafé adds that the failure to ship these 1.7 million bags meant that Brazil failed to receive US$489.72 million, or R$2.754 billion, in foreign exchange revenue, considering an average FOB export price of US$285.21 per bag (green coffee) and the average dollar exchange rate of R$5.6235 in October. “This is not only a loss for the country’s commercial transactions, but also for Brazilian coffee producers, as they receive less in the price of shipping the product, which, on average, is around 90% of the exported value,” he says.
Heron also revealed to the Minister of Ports and Airports that these obstacles have even been causing millions in losses to Brazilian coffee exporters. “In October alone, due to these logistical bottlenecks in Brazilian ports, our associates accumulated a 'port loss' of R$6.986 million, which involves extra expenses with additional storage, detentions , pre-stacking and gate anticipation. In the accumulated total for 2024, this damage to exporters' cash flow has already reached R$30.4 million,” he laments.
According to him, Silvio Costa Filho was surprised by the figures presented by Cecafé and by the concerns expressed together with Logística Brasil regarding the CEPORTOS draft bill. “The minister showed solidarity with these matters and asked that we continue to provide the Ministry and its team with this important information so that they can realistically assess the logistics scenario and seek solutions that can mitigate these risks,” he concluded.
In addition to Heron, Seixas and the minister, the following also participated in the hearing on behalf of the federal government: Alex Ávila, National Secretary of Ports; Tetsu Koike, Director of the Sectoral Policies, Planning and Innovation Program; and Karênina Martins, Infrastructure Analyst and General Coordinator of GM/MPOR.