Jun 01, 2021

Brazilian Minister Promotes Cost Savings of Ferrograo Railroad

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

In a recent webinar sponsored by the Brazilian National Federation of Port Operations (Fenop), the Brazilian National Secretary for Land Transportation estimated that the Ferrograo Railroad (Grain Railroad) from the city of Sinop in northern Mato Grosso to the Port of Miritituba on the Tapajos River (see below map) could save R$ 19 billion in transportation cost compared to transporting the cargo by truck on Highway BR-163. He emphasized that Brazil needs this railroad to stay competitive in the international market.

The Minister also promoted environmental advantages of the railroad that could reduce CO2 emissions by one million tons per year or a 50% reduction compared to truck transport. In addressing other environmental concerns, he affirmed that the railroad would not infringe on indigenous lands or conservation areas.

The Brazilian government has indicated that the Ferrograo Railroad is the most important infrastructure project in the country, but since March of this year, all the initial work on the project was put on hold when a Brazilian Supreme Court judge suspended the Executive Order that altered the boundary of the Jamanxim National Park to allow the railroad to pass through the park.

The judge indicated that legislation was needed to alter the park boundary, not an Executive Order from the President. The National Land Transportation Agency (ANTT) and the Brazilian Supreme Court continue to weigh their options on how to resolve this issue.

Brazilian farmers have been pushing for this railroad for decades as a way make their soybean and corn exports more competitive. Their grain would be moved by rail from Sinop to the Port of Miritituba and from there, it would be barged down the Amazon River to the Ports of Santarem, Barcarena, or Santana. In 2020/21, it is estimated that 32% of Brazil's grain exports will be through its "Northern Arc" of ports.

The map below is courtesy of So Noticias, and it shows the route of the railroad. The circles indicate grain terminals at the start and end of the 935-kilometer Ferrograo Railroad.