December 29, 2010

Upgrades Planned at Brazil's Principal Ports

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

The two major ports in Brazil that handle agricultural products are the Port of Santos in the state of Sao Paulo and the Port of Paranagua in the state of Parana. Both of these ports are located in southern Brazil and farmers and agribusiness have long complained that the structural deficiencies at these two ports are the main bottleneck for Brazil's agricultural exports. They also point out that high costs and poor logistics at the ports are preventing Brazilian agricultural exports from being more competitive in the world market.

Officials at both ports have announced construction projects they hope will correct some of the deficiencies. All of these projects are long term improvements and only modest improvements are expected for 2011. In fact, officials at the Port of Santos are hope for a 5% increase in tonnage shipped out of the port in 2011 while at the Port of Paranagua; they are just hoping to maintain the same tonnage in 2011 that was shipped in 2010.

At the Port of Paranagua, the announced construction projects will include the rebuilding of an existing conveyor system and the building of a completely new conveyor system. The current conveyor system has the capacity to move 9 thousand tons per hour and once rebuilt, the capacity will be increased to 16 thousand tons per hour. The reconstruction is expected to cost R$ 175 million. A completely new conveyor system is also being planned at a cost of R$ 185 million. These conveyor systems move soybeans, soybean meal, corn, and bulk sugar.

Other projects will have to be added such as new berths, storage units, and dump pits to take advantage of the new conveyor system, but these other projects remain in the planning stage.

At the Port of Santos, the federal government has allocated R$ 493 million for dredging and widening the channel as well as adding new berths and loading equipment.

All of these improvements are long overdue at both ports.