Aug 17, 2023

Freight Rates in Mato Grosso 15% Higher Than Last Year

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

One of the major concerns for farmers in the state of Mato Grosso in west-central Brazil is the high cost of transporting their grain to export facilities. Mato Grosso is in the center of South America and it is a long way from export facilities in either southeastern Brazil or on the Amazon River.

Grain transported north out of Mato Grosso to ports on the Amazon River must be moved by truck which is the most expensive way to move grain. There are plans to build a railroad from northern Mato Grosso to ports on the Amazon Rive, but completion of the railroad is many years in the future.

The cost of transporting soybeans by truck from the city of Sorriso in south-central Mato Grosso to the Port of Miritituba (approximately 1,000 kilometers) on the Tapajos River, which is a tributary to the Amazon River, is currently R$ 315 per ton or about $1.70 per bushel. It is expected to increase to R$ 330 per ton or about $1.80 per bushel in September. These prices are about 15% higher than last year at this time.

The demand for truck transport is high this year due to a record large safrinha corn crop and a lack of storage space. Farmers are still holding onto a significant percentage of their 2022/23 soybean crop forcing them to sell their corn off the combine, thus driving up the demand for trucks.

Freight rates are even higher if the grain is transported to the Port of Santos in southeastern Brazil (approximately 1,500 kilometers). Grain transported to Santos can go by truck or rail, but there is only one railroad servicing Mato Grosso, so without competition from another railroad, the freight rate on the railroad is just slightly lower than by truck.