Jan 21, 2010
Moving Soybeans North To Amazon River Ports Could Save 30% On Transportation Costs
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
With the completion of highway BR-163 linking Mato Grosso with the Amazon port city of Santarem in December of 2011, soybean farmers in Mato Grosso could realize significant savings on transportation cost by sending their soybeans north to the Amazon River instead of utilizing the traditional export routes via the Ports of Santos and Paranagua in southern Brazil. The Mato Grosso Soybean Association estimates that transportation costs could be reduced by 30% by using the northern route.
Within two years after completion of BR-163, estimates are that as much as 10 million tons of soybeans could be moved through the Port of Santarem, but a major expansion of the port will be needed before that volume could be realized. Currently, the port facilities are quite limited with only the capacity to move two million tons of grain per year. Actually, only 50% of the ports capacity is currently being utilized due to a lack of transit infrastructure and vessels having difficulty entering the port. Correcting these deficiencies and expansion plans are currently being considered.
Exporting soybeans through Santarem is expected to save at least US$ 40 a ton compared to the Ports of Santos or Paranagua. It can cost as much as US$ 140 a ton to move soybeans from northern Mato Grosso to the Port of Santos or Paranagua. Estimates are that freight costs could be reduced by 30% if the soybeans moved north instead of south. It can cost as much as US$ 3.80 a bushel to move soybeans from northern Mato Grosso to Brazil's southern ports. In east-central Mato Grosso it is even more expensive, as much as US$ 5.40 a bushel to move soybeans to Paranagua during the peak harvest season. Therefore there is a tremendous financial incentive to expand existing port facilities and to develop new export routes.