Nov 18, 2015

Farmers in Mato Grosso do Sul Want to be Included in Rail Projects

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

As a way to reduce Brazil's high transportation costs, there are numerous railroad projects being proposed in Brazil including a railroad that would link the city of Maracaju in Mato Grosso do Sul with the Port of Paranagua. These proposed railroad projects in Brazil have been prioritized and unfortunately, the one linking Mato Grosso do Sul and the Port of Paranagua is in the third and last group of rail projects. In other words, this project is at the end of line, and as a result, the farmers and cooperatives in the state are holding a series of meeting with the federal government attempting to get this project moved up from dead-last to a higher priority.

This railroad has long been one of the top priorities for farmers in the state. They want to lower their cost of transportation similar to their neighboring state of Parana, which has some of the lowest costs in Brazil. The Organization of Cooperatives in the State of Parana (Ocepar) feels a railroad coming in from neighboring Mato Grosso do Sul could be part of an integration of all the railroads in the western part of the state and they too are petitioning the federal government to move it up in priority.

In an attempt to improve their competitive position, the Port of Paranagua is improving its rail infrastructure as part of an overall improvement at the port. America Latina Logistica (ALL) currently operates a rail line that enters the Port of Paranagua and they are investing R$ 15 million to upgrade their infrastructure at the port. The plan includes upgrades to the existing tracks and improvements in the way trains are transferred from on track to another.

The upgrades are the result of an agreement between the Administration of the Ports of Paranagua and Antonina and the cooperative Coamo. When the upgrades are complete, the port will be able to unload 200 railcars per day. Once fully implemented, the rail line could transport up to 8 million tons of agricultural commodities and other products per year. Currently, only half of the project has been completed.