Sep 25, 2023

Brazil's Goal is 40% of Exports Moved via Rail by 2035

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

Brazil's Transport Minister, Renan Filho, is traveling the world in hope of attracting private investments in new rail and highway projects over the next three years. His goal is to attract 180 billion reais ($36.6 billion) to combine with 80 billion reais the Brazilian government will invest over the next three years. Last week, he was in Portugal and he will travel to Germany, the United Arab Emirates, India, and China.

Increased rail transport is urgently needed to keep pace with Brazil's expanding agricultural production. Currently, 17% of Brazil's exports including soybeans, soybean meal, corn cotton, iron ore, minerals, etc. are transported by rail and the goal is to increase that to 40% by 2035. Some progress has been made on increased rail transport with the recent completion of the North-South railroad linking the Port of Santos in southeastern Brazil with ports along the northeastern Atlantic Coast, but much more is needed.

Most of Brazil's agricultural products move by truck, which is the most expensive way to transport bulk commodities. This puts Brazil at a disadvantage compared to its competitors. An improved rail system would also reduce input costs for Brazilian farmers. Currently, about 85% of Brazil's fertilizers are imported and transported to the interior via truck. Fuel, chemicals, machinery are also transported by truck to Brazil's vast interior.