Nov 02, 2016

Governor of Mato Grosso wants Ferronorte Railroad Extended

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

Farmers in Mato Grosso have been waiting for decades for the promised benefits of railroads linking Brazil's largest grain producing state to distant Brazilian ports.

There are a lot of proposals being proposed for new railroads to be built in the state, but currently there is only one railroad in the state and it is limited to the southeast corner of the state. The Ferronorte Railroad (North Railroad) enters the southeast corner of Mato Grosso and terminates at the city of Rondonopolis. There are four grain terminals along the railroad at Alto Taquari, Alta Araguaia, Itiquira, and Rondonopolis. The intermodal terminal at Rondonopolis is the largest in Brazil.

The Ferronorte Railroad is now owned by the Cosan Group, which is the largest sugar and bioenergy producer in Brazil. When Cosan purchased the railroad, local government officials and farmers in Mato Grosso were concerned that the company would focus their efforts on moving their sugar production to the Port of Santos and not on extending the railroad further into the state of Mato Grosso.

In an effort to push for the extension of the railroad, the governor of Mato Grosso recently met for the third time this year with company officials who reiterated their intension to extend the railroad. The governor emphasized the need to extend the railroad another 210 kilometers from the city of Rondonopolis to the state capital of Cuiaba. From there, he wants the railroad extended straight north into the heart of grain production in the state. The CEO of Cosan assured the governor that they are looking at alternatives for the railroad extension and that the project would move forward.

The intermodal terminal at Rondonopolis was inaugurated in 2013 and the volume of products shipped out has continued to increase. The Ferronorte Railroad currently transports primarily agricultural products to the Port of Santos, which is the largest port in Latin America. With expansion and modernization, the volume of commodities transported by the railroad is expected to double in the years ahead.