May 28, 2019

Conab to Reduce the Number of its Grain Storage Facilities in Brazil

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

In an effort to modernize and streamline their operations, Conab is now in the process of closing some of its grain storage facilities in Brazil. Conab maintained a grain storage operation as a way to smooth out grain prices in Brazil, but many of the facilities had fallen into a state of disrepair due to a lack of funds for maintenance.

The closures will be in locations where there is ample private storage capacity. A total of 27 facilities will close with 13 of those units in the center-west region, 5 in the southeast, 4 in the north, 3 in the northeast, and 2 in the south.

According to the president of Conab, the closures will be done in stages and once complete, Conab is expecting to save R$ 6.2 million annually in operating costs. The workers at the closed facilities will be reassigned to other facilities. Once completed, the number of Conab's grain storage facilities will decline from 92 to 65. Some of these units are individual grain silos within a larger complex.

The closure of these facilities is not expected to significantly worsen the chronic shortage of grain storage facilities in Brazil because many of these facilities were only partially utilized or not utilized at all due to poor conditions.