Jul 23, 2014

Conab's Storage Facilities fall into Disrepair in Mato Grosso do Sul

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

A recent series of reports by Canal Rural in Brazil illustrated the state of disrepair of many of Conab's grain storage facilities in the state of Mato Grosso do Sul. According to the reports, Conab has ten grain storage units in the state but only six are operational and the ones that are operational are underutilized. Conab's largest facility in the state, with the capacity to store 50,000 tons of grain, is closed.

The problem is a lack of funds to maintain the facilities and to make needed repairs. Problems range from leaking roofs, to broken dryers, and non-functioning scales. In many of the closed facilities Conab only maintains a skeletal security presence to keep out squatters.

According to the president of one of the local Rural Syndicates, Jose Scalabrini, it's a real shame because Conab's storage potential in the state is already small and the closed facilities makes it even smaller. Normally, Conab uses these facilities to store grain purchased by the government as a means to stabilize grain prices in a region.

The Brazilian government started a five year R$ 25 billion real program in 2013 to build more grain storage facilities in the country. Five hundred million reals of that program was dedicated to modernization and expanding Conab's storage facilities, but apparently the funds have yet to reach the state of Mato Grosso do Sul. Some local officials have traveled to Brasilia in an effort to rent some of the closed facilities for local co-ops, but even those efforts have not been successful.