Oct 29, 2010
Barges Moving Again on the Madeira River in Northwestern Brazil
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
After an extended dry season and several months of low water levels, barges are once again carrying soybeans down the Madeira River in northwest Brazil on their way to ports on the Amazon River. The two grain companies that use the river to barge soybeans, Amaggi and Cargill, both reported that their barging operations have resumed operations after being suspended in August. In August, the water level on the Madeira River was the second lowest in forty years. The only time the water level was lower was in 2005.
The Madeira River does not flow through the state of Mato Grosso, but is the only barging operation available for transporting soybeans produced in the state of Mato Grosso. The soybeans must be first trucked from western Mato Grosso to the city of Porto Velho in the neighboring state of Rondonia where the barging operation begins.
Amaggi barges the soybeans to the Port of Itacoatiara on the Amazon River where they are loaded onto ocean vessels. Amaggi was expected to originate 4.5 million tons of soybeans in 2009/10 and 60% of their exports are barged down the Madeira Rive to the Port of Itacoatiara. When the barging operation was suspended, Amaggi had to transport soybeans by truck to ports in southern Brazil in order to meet some of the contracts.
Cargill also barges soybeans down the Madeira River, but their export terminal is closer to the mouth of the Amazon River at the city of Santarem. Their export facility at Santarem is modest in size and they only export about one million tons from that facility per year. Currently, 95% of the soybeans exported through their facility arrive there by barge, but that could all change once a new highway linking Mato Grosso and the city of Santarem is completed later in 2011. Once the highway is completed, soybeans produced in northern Mato Grosso can then be trucked to the export terminal at Santarem, which will reduce the cost of transportation compared to moving the soybeans to ports in southern Brazil.
Cargill already has plans to greatly expand the facility to accommodate the expected increase in volume. This port also has the advantage of being several thousand kilometers closer to Europe than the ports in southern Brazil.