Oct 19, 2023

Low Water Diverting Corn Exports from Amazon to Port of Santos

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

Northern Brazil continues to be impacted by a prolonged drought that has lowered water levels on the southern tributaries to the Amazon River. These southern tributaries are important for moving grain from Mato Grosso to Brazil's "Northern Arc" of ports.

Low water levels on the Madeira and Tapajos rivers are forcing the diversion of some vessels from Amazon ports to the Port of Santos in southeastern Brazil according to the National Association of Grain Exporters (Anec). Most of Brazil's 2022/23 soybeans have already been exported, so any diversion now would impact corn shipments. The volume of the diversion is small, at least for now, and it is not expected to impact Brazil's overall export program for 2023.

The Port of Santos is the alternative of choice because of its rail link to the state of Mato Grosso, which is Brazil's largest corn producing state. Approximately 70% of the grain arriving at the Port of Santos is by rail.

From January through August of this year, 44% of Brazil's corn exports originated from the "Northern Arc" ports of Barcarena, Itaqui, Itacoatiara, or Santarem according to Conab. During the same period, the Port of Santos was responsible for 31% of Brazil's corn exports.

Of the 34 million tons of corn exported from Brazil from January through September, 7.9 million were destined for China. The two countries agreed to phytosanitary standards for corn exports in November of 2022, so this is the first year of Brazilian corn exports to China.

Anex expects Brazil to export 99 million tons of soybeans and 52-53 million tons of corn in 2023, but some traders feel the soybean exports may reach 100 million tons and soybean exports may reach 100 million tons. These are significantly higher than the 77.8 million tons of soybeans and 44.7 million tons of corn that were exported in 2022.