Oct 01, 2020

"Northern Arc" of Ports Increase Share of Brazil's Grain Exports

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

In a recent Logistical Bulletin issued by Conab, they indicated that the "Northern Arc" of ports in Brazil continue to increase their share of Brazil's grain exports. From January through August of this year, 34% of Brazil's soybean exports and 31% of Brazil's corn exports left through the Northern Arc of ports including the ports of Barcarena in the state of Para, Miritituba (Santarem) in the state of Para, Itacoatiara in the state of Amazons, and Itaqui in the state of Maranhao. The export volume for these four ports is similar to the export volume for the Port of Santos, which is Brazil's largest port according to data from the National Water Transport Agency (Antaq).

As the Norther Arc of ports increase their share of Brazil's exports, ports in southern Brazil are losing some of their market share especially for grain exports.

In 2010, the northern ports in Brazil accounted for 14.4% of the soybean and corn exports. In 2019, the northern ports accounted for 31.9% of the soybean and corn exports according to the National Water Transportation Agency (Antaq). This increase can be explained by the improved infrastructure in the region especially the completion of Highway BR-163 that lowered freight costs from Mato Grosso to the Port of Maritituba. The northern ports offer a lower cost alternative for grain shipments from the central states of Brazil especially the state of Mato Grosso, which is Brazil's largest producer of soybeans, corn, cotton, and cattle.

Even with an increase in exports from the northern ports, Brazil still has an imbalance in its transportation system by relying primarily on highway transport. A study by the Planning and Logistics Company (EPL) emphasized the need for flexibility in the modes of grain transport in Brazil. They state that if trucks were only used for short distances and more efficient modes of transportation such as rail and barge were used for the long hauls, the reduction in transportation cost could be as much as 58% depending in the route and the modes used.

There are three new railroads proposed for the state of Mato Grosso, but it will be many years before these projects are completed. In the meantime, grain production continues to increase in Brazil and the northern ports will continue to move more grain exports.