Dec 10, 2013

Soy Barging along Tapajos River in northern Brazil to Begin in Feb.

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

Once the Brazilian highway BR-163 is completed northward from the state of Mato Grosso to the Amazon River, soybeans will be trucked to barge loading facilities at the city of Itaituba, Para for barging up the Tapajos River to ports on the Amazon River. In preparation for completion of the highway, numerous barge loading facilities are in various stages of construction along the river.

In 2014 it is estimated that 3 million tons of soybeans will head north along the highway and 2.2 million of those tons will go to the Bunge barging operation. The remaining 800,000 tons will be transported all the way to the Amazon River port city of Santarem where Cargill already has a grain terminal. In 2015 it is estimated that 6 million tons will head north along the highway and the tonnage will increase every year going forward.

Along the banks of the Tapajos River there are eight barging facilities in various stages of construction or planning. The facility owned by Bunge is in the final stages of construction and it only needs to be granted an operational license to start loading. The company expects to start shipping grain in February of 2014. Three other facilities are expected to begin operations in 2015 and three more in 2016.

There still remains 180 kilometers of unasphalted highway before arriving at the barging facilities and 320 kilometers of unasphalted highway before the highway terminates at the city of Santarem on the bank of the Amazon River. The entire highway was supposed to be finished in 2011, but now the completion date has been pushed back to sometime in 2015.

Eventually the highway will be completed and when it is done, it will benefit the grain producers in central and northern Mato Grosso. Grain produced in southern Mato Grosso will still be transported to ports in southern Brazil either by truck (about 60% of the total) or by rail (about 40% of the total) because it is a shorter distance than going all the way to the Amazon River.