August 29, 2016 / 5:31 PM / 3 years ago

UPDATE 1-Brazil corn export drop raises fertilizer delivery costs -CEO

(Adds details on corn crop losses)

SAO PAULO, Aug 29 (Reuters) - A sharp drop in Brazil’s corn output in 2015/16 that reduced the flow of the grain from farmlands to ports has pushed up freight costs on the return trip for fertilizer, the chief executive officer of Fertilizantes Heringer said on Monday.

The reduced flow of trucks carrying corn to Brazil’s southern ports has pushed up the cost of getting fertilizer to farms in the interior of Brazil, said Dalton Carlos Heringer, CEO of the country’s third-largest distributor of the crop input.

“Deliveries are happening, but freight has gone up,” the executive told Reuters, adding that freight costs have risen 15 to 20 percent over the past 12 months in dollars, which is affecting the tail end of sales for the 2016/2017 grain crop planting.

The large flow of corn and soybeans to the ports in recent years has helped offset freight costs for the trucking companies when they haul fertilizer, which is predominantly imported, back to the farms.

Irregular rainfall in Brazil’s main center-west grain belt in early 2016 slashed output of corn and even soybeans, reducing the flow of Brazil’s grain exports.

Producers are already beginning to plant the new corn crop in Brazil’s southernmost farms, where rains have been most favorable.

Heringer said the company founded by his father expects sales to return to record 2014 levels after a difficult 2015. From January to July, Heringer delivered 16.5 million tonnes of fertilizers, up 10.4 percent from the same period of 2015 and up slightly from 2014.

“The recovery is being driven by prices that are falling in dollars,” he said. (Reporting by Gustavo Bonato; Writing by Reese Ewing; Editing by Lisa Von Ahn and Jonathan Oatis)

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