Various factors might be influencing the spot market prices and cause differences between the
local spot market price and the calculated theoretical price, as shown in figure 4.11. On the one
hand, market power could be a reason for differing values. The theoretical price includes only
visible cost factors. However, the power of demand and supply may act as a price driver for local
spot market prices. It may increase local spot market prices in periods of low supply or high world
market prices, or lower the prices in a contrasting market situation, respectively. A further factor
of influence might be time. To move the soybeans from the local warehouse to the ship it takes
one day or more (see table 4.2). The transit time represents a time shift. The local spot market
price is quoted at trading day x while the fob price received may refer to a later date, at which
the product is loaded onto the ship (fob price quotation at day x+n, where n = the transit time in
days). As the market is volatile, changes might have occurred within this period, so that calculated
prices may vary from the local spot market prices. Besides, it has to be considered that the
used values are monthly averaged values, which might lack precision and congruence.
The observed differences were highest in Rondonópolis. As its travel distance to the seaport is
not the largest of all selected regions but Rondonópolis is a major trading place, it could be assumed
that market behavior is the major determinant in this case. The calculation performed for
the month of September in 2011 revealed that the differences in prices increased between April
2011 and September 2011 for the Center West regions of Sorriso, Rondonópolis and Rio Verde.
Freight prices were lower (Sorriso and Rondonópolis: 7 % decrease; Rio Verde: 12 % decrease) in
September 2011 and producer prices higher (Sorriso: 15 % increase; Rondonópolis and Rio Verde:13 % increase) so that the share of transportation costs on overall logistics costs slightly decreased.
In Barretos freight prices remained on an equal level (0 % change) and the relation of
transport costs to total costs did not change significantly. This could be reasoned by the low importance
of the soybean crop for that region and a probably continuous demand for transportation
of agricultural products over the observed period. As a result, freight prices do not vary
much before, during and after the soybean harvest season as it is the case in the other regions.
The local spot market price increased less (8 % increase) than in the other selected regions. The
higher increases could be attributed to the decreased freight rates. A relation between freight
price decrease and producer price increase could be assumed.