Jul 11, 2017

More Problems for Highway BR-163 in Northern Brazil

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

When there is only one road heading north out of Mato Grosso to the Amazon River, any problem on that highway could cause a slowdown on exports from Brazil's northern ports. That is what happened this past March when BR-163 was closed due to heavy rains that made unpaved sections of the highway impassable backing up thousands of grain trucks for as long as three weeks while road crews struggled to reopen the highway.

It is happening again, but this time it is a man-made blockage. Last Friday, protestors blocked highway BR-163 near the town of Novo Progresso in the state of Para. The protestors included farmers, ranchers, lumber men, and merchants. They want to reclaim their right to utilize part of a forest preserve that was recently taken away by the Brazilian President.

This protest is part of a complex trade of forest preserve acreage needed to allow the construction of a railroad from Mato Grosso to the Amazon River. The Grain Railroad as it is being called, must run through an existing forest preserve and in order to adhere to environmental laws, a preserve of equal size must be set aside someplace else and that is the source of the conflict. There have been a series of these blockages over the last several months. In April, the highway was closed for five days as gold and diamond miners complained that the proposed new forest preserve would block access to their work sites.

According to the Brazilian Association of Vegetable Oil Industries (Abiove), only 25% of the needed volume of grain is arriving at the barging facilities at the Port of Miritituba on the Tapajos River and if the blockage persists for several more days, vessel loading at ports on the Amazon River may have to be halted. Currently corn is the grain being impacted the most, but there could be problems with soybeans as well. Abiove is urging the government to take immediate action to open the highway before the situation gets worse.

Blocking highway BR-163 in Mato Grosso is actually a common occurrence. Truckers are known for stopping truck traffic any time they want to protest low freight rates for example. Other organizations such as municipal employees, indigenous groups, landless poor, miners, etc. block the highway to press their case and gain attention for their cause. Usually the federal police allow the protest to proceed for several days while their case is being discussed either at a local level or in Brasilia. Eventually the case is resolved or the federal police order the highway to be reopened.

Depending on the group that is protesting, sometimes they stop only trucks allowing passenger cars to get through as well as emergency vehicles and trucks carrying animals destined for slaughter. Other times, they stop all the traffic except for emergency vehicles. I personally went through a blockade set up by truck drivers on BR-163 in March of this year at the city of Rondonopolis, Mato Grosso. We had no problem getting through even though there were thousands of blocked grain trucks parked on both sides of the highway.