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Bunge Port Deal in Southern Brazil Ends, Opening Door to Rivals

Maritime Activity Reports, Inc.

April 13, 2023

© jorgealberto / Adobe Stock

© jorgealberto / Adobe Stock

The end of a contract between a Bunge agent and a state-run port company in southern Brazil could make room for rivals interested in the public grains terminal, documents and court filings showed.

The contract between Bunge port agent Litoral and the Sao Francisco do Sul port authority ended on April 11 and does not foresee an extension.

Bunge declined to comment. Litoral did not reply to a request for comment.

The port authority did not answer questions about whether it is preparing new rules to attract operators to the public grain terminal.

Sao Francisco do Sul's public and private terminals shipped an average of 5.7 million tonnes of soybeans and corn annually in the six years until 2022, according to shipping data, making it Brazil's sixth most active port for corn and eighth for soy exports in 2022.

The port's public terminal sits next to two private facilities, including one owned by Bunge and another by a local unit of Japan's Marubeni 8002.T called Terlogs.

In 2020, the port authority proposed a model under which agents could take turns operating the public terminal based on their ability to ship grain volumes and pay fees for the port.

Bunge's rivals have challenged the fairness of that arrangement in court, with mixed results.

Last week, a lower court sided with six port agents claiming irregularities in the rules that awarded the contracts, which are now expiring. Judge Joao Franco ruled on April 5 the bidding process had flaws and should be "annulled," according to the decision seen by Reuters.

Franco's decision is the latest in the long-running dispute over the port's public area, which sparked a series of legal, administrative and regulatory challenges.

The port authority did not comment on Franco's ruling.

(Reuters - Reporting by Ana Mano)

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