Brazil, Limited Storage Capacity
With a huge deficit in grain storage capacity in Brazil, the need to properly manage and record stock is particularly important.
Our SGS Stock Management Agreement service, soon to include Smart Warehouse Technology too, helps clients optimize storage and keep stock secure for their customers.
In terms of capacity, Brazil produced 258 million metric tonnes (mmt) of grains in the harvest 2019/2020, with static storage at just 170 mmt, thus there is a storage deficit of 88 mmt, creating challenges for the industry.
The most current regulations require that storage of bulk grain uses a thermometry system to monitor temperatures in warehouses, with sensors distributed in each 150m3 of static storage capacity. The risks to stored grain come in many different forms including natural disasters, fraud disrupting global supply chains, financial issues, and technology failures.
Our Stock Management Agreement (SMA) service includes three key elements to ensure the quantity and quality of a client's goods:
- Temperature control
- Volume monitoring
- Quality monitoring
Clients can choose a one-off service, such as a periodic spot inspection, or a longer-term agreement in the form of continuous monitoring.
Introducing Storage Sensors
Our experienced team in Brazil brings a wealth of knowledge to our current level of service and enables us to expand to also offer Smart Warehouse Technology. This system keeps the environmental conditions in a client's warehouse at the optimum for the commodity. Several devices are strategically located around the warehouse to detect fluctuations in temperature and moisture, and stowage conditions are controlled by monitoring the relative humidity, temperature and carbon dioxide levels.
Our clients choose SGS because of the impartiality we provide as an independent third party. Over the years, our local team has built trust with clients and worked hard to minimize risks so their reputation and financial position remains secure.
Enhanced Security for Foreign Lenders
Brazil enacted Law No. 13,986 in April 2020, improving the security offered to foreign banks when financing commodity trading in goods such as corn and soy. It allows foreign lenders to directly hold farmland as collateral and provides greater security against the effects of Brazilian companies going bankrupt. Since April, the sector has reported a 50% increase in inquiries from foreign lenders, with a number of paused deals now progressing due to the new collateral instrument.
For inquiries, please contact:
Business Manager in Brazil
+55 11 3883 8880