The carriage of soya bean cargoes from Brazil to China

Norway-based Gard has warned of the risks of moisture content on the loading of soya beans. The insurer noted that soya beans were big business, with Brazil now the world’s leading producer, surpassing the US. Consultant scientist Dr Stephanie Heard supplied expert insight on the carriage of soya beans in bulk between Brazil and China.

Gard said that it had seen many claims arising from soya bean cargos transported from Brazil to China for damage and alleged damage at discharge. The claims had been made by receivers and/or cargo insurers under bills of lading against the vessel. They often involved very large security demands.

Gard noted that these claims were often passed to charterers, particularly when the Interclub agreement terms had been incorporated in the charterparty.

Dr Heard said that the soya bean planting season in Brazil began as early as September in some of Brazil’s central growing regions. After the plants are left to dry in the field, when 90 to 100% of the pods are brown in colour, they are ready to be harvested. Most farmers aim to harvest soya beans with a moisture content of 13%.

However, Dr Heard noted that monitoring was usually assessed by pod colour which, as a subjective assessment, might not always be as accurate as using moisture meters. More sophisticated harvest operations used combine harvesters equipped with moisture meters. If drying is required, it may occur either at the farm or at cooperatives, where drying machinery is shared.

From the beginning of January, Brazilian growers start to harvest soya beans growing across an estimated 36.9 million hectares of land, a production area larger than Germany. However. transporting the harvested beans from field to ports remained a challenge in Brazil, where the transport and crop storage infrastructure has failed to keep pace with ever-increasing production. Soya beans were trucked hundreds of kilometres from the Mato Grosso de Sol and Cerrado savanna to major export ports in Santos, Paranaguá and Rio Grande.

Today, a larger proportion of soya beans originating from Mato Grosso and expanding growing regions in the North are trucked along the BR 163 highway to Amazon river port cities. There, the beans are loaded onto river barges which travel along the Amazon and Tapajós rivers in convoys to ocean ports in Sanatrem, Bacarena and São Luis.

All routes may take multiple weeks depending on availability of transport and weather conditions which severely affect the condition of the roads. The laden trucks and barges may be regularly exposed to heavy rain showers.

Dr Heard observed that Brazil was the world’s second-largest producer of soya beans for many years, competing only with the US. The rivalry between US and Brazilian soya bean farmers had been driven by China’s growing appetite for soya beans, which are crushed to produce soya bean oil for cooking and soya bean meal to feed China’s swine herd, China imported in excess of 95m tonnes of soya bean in 2017, of which the US supplied some 32.9m tonnes and Brazil supplied some 50.9m tonnes.

As a result of the US-China trade war in 2018, when China imposed a retaliatory tariff on US soya beans, shipments from the US halved. During this time, Brazilian soya bean growing regions expanded further and exports increased in order to meet Chinese demand.

An outbreak of African swine fever virus in August 2018 drastically reduced demand for soya bean meal in China and this was reflected in the Brazilian soya bean export figures. The trade has since started to recover and Chinese crushers appear keen to make up the supply issues related to Covid-19 restrictions earlier this year.

As of May 2020, Brazil surpassed US soya bean annual production, harvesting an estimated 117m tonnes.

However, there was often a danger of bulk soyabean cargoes self-heating. Gard said that the types of condition of some of these bulk cargos that we have seen on discharge had included mould, caking and discoloration.

Dr Heard said that the cargo temperature and the availability of moisture within a soya bean cargo were the two key factors that determined whether mould growth could be supported in soya beans in bulk storage. Mould spores that were naturally present on the soya bean seed could germinate and grow when the relative humidity at the surface of the soya bean rose above 65%. The relative humidity at the surface of the beans was determined by the soya bean moisture content and temperature. Once established, mould growth could cause the degradation of the bean through the breakdown of the soya bean and production of heat. This could further lead to the self-heating pockets of cargo within a bulk stow. Pockets of self-heating cargo tended to become caked and as heat progresses over time, the soya beans might discolour from yellow to brown, and, in the worst-case scenario, to black.

High temperatures could compromise the quality of the extracted oil and protein availability within soya bean meal products.

Dr Heard said that, to minimize the risk of deterioration during a voyage, the moisture content of a soya bean cargo should be as close as reasonably possible to the safe transportable moisture content at the time of shipment. Nonetheless, a risk of deterioration persisted, since large consignments typically comprised smaller parcels of different inherent quality, specifically, parcels with varying moisture contents and potentially different temperatures.

Dr Heard said that soya bean temperatures above 25°C, combined with moisture contents over 13%, might create conditions suitable for mould growth and indicate that the parcel of soya beans should probably be dried further. “This is contrary to the moisture content specified on most commercial contracts which specify a moisture content of 14% which is much too high a tolerance for soya beans being shipped over long distances”, she said.

Dr Heard felt that the industry also needed to invest to improve current infrastructure and storage facilities at the export ports.

“Adequate drying facilities should be available at the export port to allow drying of cargo parcels suspected of having a high moisture content on any barges or truckloads arriving at the port. Suspect cargo should be re-dried prior to storage in the export bulk warehouses/silos before final loading onto vessels. Alternatively, any lots of cargo suspected to be at risk should be redirected for shipping over a shorter distance rather than longer voyages to China”, she said.

Gard asked Dr Heard that, since P&I clubs insured cargo claims for both owners and charterers, was there anything clubs could do proactively to limit these types of claims?

Dr Heard said that, if claims were high value and common, it might be prudent for the shipowners and their clubs to consider appointing experienced surveyors or cargo superintendent during loading. The superintendent could monitor truckloads/ barge loads of soya beans as they were loaded.

Gard said that, when there was a claim, it had found that many of the cases revolved around ventilation practices. Dr Heard observed that there was the possibility that condensation would form on the underside of the hatch cover and drip onto the cargo surface, resulting in mould growth on the surface during a voyage from Brazil to China. This was known as “ship’s sweat” and occurred when the warm air rising from a warm cargo comes into contact with cooled steelwork. As the air is cooled upon contact, moisture condenses onto the steelwork. This typically occurs when vessels sailed from warm to cooler climates, for example sailing around the Cape of Good Hope.

Proper ventilation helped to remove warm air within the head space to reduce the risk of ship’s sweat formation.

In event damage is observed on the cargo surface when the holds were initially opened, good quality photographs of the cargo surface for each hold had to be obtained. Obvious mould damage at the cargo surface could usually be segregated either by hand or by grab. It was also essential for an experienced cargo superintendent/ surveyor to be appointed to obtain representative samples throughout discharge in accordance with FOSFA sampling rules. This would ensure that representative samples of the cargo could be obtained and analyzed according to the appropriate standards in order to confirm whether the cargo quality has been compromised.

Gard said that, in its experience, blending of caked/discoloured cargo with visually sound cargo was usual practice at most Chinese crushing plants. Usually, the refinery would calculate the appropriate blend ratio in order to create a blended crude oil and soya bean meal product of acceptable quality.