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August 16, 2017

More of Brazil's Corn Exports Exiting Brazil via Northern Ports

Grain companies in Brazil continue to send more of the grain production north to ports in northern Brazil due to the lower transportation costs. According to the Mato Grosso Institute of Agricultural Economics (Imea), the route from Sorriso in central Mato Grosso to the Port of Miritituba on the Tapajos River is becoming ever more popular for grain exports.

The Port of Miritituba along with other ports on the Amazon River and along the northern Atlantic Coast of Brazil, are collectively known as the "Northern Arc" of ports. Many of these northern ports are undergoing expansion and the amount of grain flowing north is expected to continue increasing on a yearly basis.

During the first week of August the cost of trucking soybeans from Sorriso to the Port of Santos in southeastern Brazil averaged R$ 16.68 per sack or approximately $2.43 per bushel. Trucking the soybeans north on highway BR-163 to the Port of Miritituba averaged R$ 13.20 per sack or approximately $1.92 per bushel.

For corn, it cost more to move the corn than it does to purchase the corn due to the high freight rates depressing prices paid to the farmers. During the first week of August, corn in Sorriso was selling for R$ 10.43 per sack or $1.51 per bushel. Corn producers feel they need at least R$ 18 per sack or approximately $2.60 per bushel to turn a profit.

With the completion of highway BR-163 from Mato Grosso to the Amazon River and the construction of what is being called the "Grain Railroad" from Mato Grosso to the Amazon River, it is estimated that within ten years, nearly half of Brazil's grain exports will exit these northern ports.