The impact of Chinese imports of soybean on port infrastructure in Brazil: A study based on the concept of the “Bullwhip Effect”

Abstract

Brazil is a continental country and the major soybean production areas are located far from the ports. Thus, the storage, transport and port infrastructure represent an important factor in the export of the product. China is the largest importer of Brazilian soybean, with monthly and yearly volumes variability. This study aims to identify the impact of the variation in export volumes of soybean to China on the Brazilian port infrastructure, exploiting the concept of the ‘bullwhip’ effect (BE). Data on the export volumes of the five largest soybean-producing States is used to calculate the extent of the bullwhip effect caused by the demands for port services from these producer States on the main exporting ports. Beyond the variability of Chinese demand, climatic conditions contributed to produce bullwhip effect up to 2.0 in 2011, causing pressure on the ports of Santos and Paranagua. The research results suggest that to reduce the bullwhip effects provoked by the Midwest Producers-States, it will be necessary to design informational and coordination mechanisms to integrate the logistical agents involved in the export process and to invest on infrastructure (storage capacity).