Aug 23, 2019
Exports from Brazil's "Northern Arc" of ports could hit 35 mt in 2019
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Brazil is now the largest soybean exporter and second largest corn exporter in the world thanks in part to new export facilities in what is called the "Northern Arc" of ports on the Amazon River and along the northern Atlantic Coast of Brazil.
The "Northern Arc" of ports is allowing Brazil to increase its grain export capacity without the traditional long delays in getting the grain to the southern ports or long lines of vessels waiting to load.
According to the National Grain Exporters Association (Anec), the amount of grain now being exported out of Brazil's northern arc of ports is equivalent to the amount of grain exports from the Port of Santos, which is the largest port in Latin America.
Anec estimates that Brazil could export as much as 35 million tons of grain out of its northern ports in 2019. Over the last five years, the amount of grain exported from Brazil's traditional southern ports increased 16% while exports out of Brazil's northern ports increased more than 300%.
Companies such as Bunge, Cargill, and Louis Dreyfus have invested millions of dollars in barging and port facilities to move soybeans and corn produced in Mato Grosso down the Amazon River to export facilities. One of the major improvements has been the construction of barging facilities at the Port of Miritituba on the Tapajos River, from which grain is barged down the Amazon River to export facilities near the mouth of the Amazon River.
Currently the cost of moving grain north out of the state of Mato Grosso to the Amazon River is about equivalent to moving grain south to Brazil's southern ports, but that is about to change. Paving of highway BR-163 from Mato Grosso north to the Amazon River is scheduled for completion before the end of 2019, and once completed, it will significantly reduce costs.
More long term, a consortium of grain companies will be bidding on the right to build a railroad from northern Mato Grosso to the Port of Miritituba. Bidding on the Ferrograo Railroad (Grain Railroad) is scheduled for late 2019 or early 2020.
These improvements in Brazil's infrastructure are coming at a time when the United States and China are engaged in a protracted trade dispute which has resulted in significantly reduced soybean exports from the United States to China.