Oct 17, 2023

Low Water Levels on Brazilian Rivers Could Lead to Shipping Delays

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

A prolonged drought and record heat in northern Brazil has resulted in near record low water levels on the Amazon River and two of its important southern tributaries, the Madeira River, and the Tapajos River. These two tributaries are important transportation routes for grain shipments in northern Brazil. Most of the 2022/23 Brazilian soybeans have already been shipped, so the concern now is for the 2022/23 corn shipments.

The Madeira River in western Brazil (white on map below), is at record low levels with beaches and rocks appearing that have never been seen before. The main port on the river is Porto Velho located in the city of Porto Velho (see map). Soybeans and corn produced in western Mato Grosso and Rondonia are barged out of this port by Cargill, Bunge, and Amaggi to other Amazon ports near the city of Manaus and Santarem where it is loaded onto ocean going vessels. The barge capacity from Porto Velho are being reduced 50% and the number of barges in a tow is being reduced as a precaution.

The Port Velho port is rather small compared to other northern ports in Brazil, but it is important to producers in western Mato Grosso and Rondonia. It is particular importance for conventional soybean producers in western Mato Grosso because the port has dedicated facilities to handle only conventional soybeans (non-GMO) that must be kept identity preserved and separate from most of the soybeans grown in Brazil.

The Tapajos River is a critical transportation route for grain produced in northern Mato Grosso. Soybeans and corn produced in northern Mato Grosso are trucked north on Highway BR-163 to the Port of Miritituba on the Tapajos River where multiple barging operations transport the grain to larger ports at the city of Santarem or ports near the city of Belem at the mouth of the Amazon.

Water levels at the Port of Miritituba on the Tapajos River are at record low levels and barge capacities are being reduced 40-50% and there are fewer barges per tow. Barge capacities are usually reduced during the dry season, but the current situation is unprecedented. The principal ports that receive grain barges are Itacoatiara (near the city of Manaus), Santarem (in the city of Santarem), and Barcarena (near the city of Belem at the mouth of the Amazon River).

The heat and drought has been linked to mass deaths of fish and river dolphins as well as problems shipping supplies to local communities that depend on river transport in the rainforest. The city of Manaus, which is the largest city in the Amazon, is reporting very poor air quality due to smoke from illegal burning and land clearing by squatters and farmers in the region.

The Amazon region is under pressure from the El Nino weather phenomenon that has led to below normal rainfall in the Amazon basin. Everyone is hoping that rainfall levels will increase in November, but until then, the situation will probably get worse before it gets better.

Personal note - I have been on the southern tributaries of the Amazon such as the Madeira and Araguaia Rivers, and all these rivers are bigger than the Mississippi. There are no bridges across these rivers, so you cross on a ferry. One of the most interesting things when crossing these rivers are the pink freshwater dolphins that accompany the ferry.

When all the tributaries flow into the Amazon from the south, west, and north, they form an enormous body of water. There are places on the Amazon where you can barely see the other bank, It's unbelievable, it looks like Lake Michigan from downtown Chicago, but its muddy and flowing in front of you.

Below is a map of Brazilian rivers including the Madeira River (in white) and the Tapajos River (right above the word Brazil).