May 10, 2010
Only 13% of Soy Produced in the Center-West Move by Barge
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Soybean producers in central Brazil continue to search for more economical ways to transport their soybeans to the various Brazilian ports, but of the five rivers that currently support barging operations in Brazil, only two, the Madeira-Amazonas and the Tiete-Parana are currently capable of transporting soybeans from the Center-West region of Brazil.
Two additional barging operations are being proposed. One along the Teles Pires-Tapajos Rivers, which would benefit producers in northern Mato Grosso, and one along the Tocantins-Araguaia Rivers which would benefit producers in eastern Mato Grosso as well as five other states - Goias, Tocantins, Maranhao, and Para. According to Wilson Izidorio of the National Infrastructure and Transportation Department (DNIT), construction of locks necessary for the Tocantins-Araguaia project is scheduled to begin in September. No funds have been committed to the Teles Pires-Tapajos project.
Of these two barging operations in existence, the Madeira-Amazonas operation, which is owned by the Maggi family, is the most important for soybean producers in Mato Grosso. Soybeans produced in western Mato Grosso are trucked to the Madeira River in the state of Rondonia where they are loaded onto barges. From there, they are barged 1,056 kilometers to the Port of Itacoatiara on the Amazon River. They are then transferred to ocean going vessels and transported the last 1,000 kilometers to the mouth of the Amazon River. The entire trip is 1,000 kilometers shorter than if the soybeans were sent to the southern Brazilian Port of Paranagua. In 2009, the Madeira-Amazonas barging operation transported 3.2 million tons of soybeans. The two barging operations transport approximately 13% of Mato Grosso's soybean production.
From the city of Sinop, located in northern Mato Grosso, it can cost as much as US$ 3.50 a bushel to transport soybeans to the Port of Paranagua in southern Brazil during the peak of the harvest season. If the Teles Pires-Tapajos barging operation was in existence, the transportation cost could be lowered by two thirds. That would transform soybeans grown in northern Mato Grosso from some of the most expensive soybeans in Brazil to some of the cheapest produced soybeans in Brazil.
Different barging operations for different parts of Mato Grosso might sound like overkill until you consider that Mato Grosso is the size of the entire Midwest and it is very difficult and expensive to transport soybeans from one side of the state to the other side especially during the rainy season when many dirt roads are nearly impassable.