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December 31, 2018

Expansion of Port of Paranagua in SE Brazil going Smoothly

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

As the 2018/19 Brazilian soybean harvest gets underway, news of any logistical problems in Brazil will be front and center considering the fact that China will be very anxiously awaiting delivery of new crop soybeans.

In years past, the Port of Paranagua in southeastern Brazil was notorious for long lines of grain trucks waiting to unload and long lines of vessels waiting to load soybeans, but the port has made tremendous improvements in recent years. The long line of trucks is gone due to a new computerized system of scheduling deliveries to the port. If a truck driver arrives at the port without first being authorized, he will not be allowed to enter the port.

The long line of vessels may also soon be a thing of the past. The port is undergoing a very ambitious expansion program to expand and modernize the existing berths and to add a berth to the existing three berths in the Public Corridor.

The Governor of Parana recently toured the port to inspect the ongoing work. Berths 201 and 202 are undergoing modernization and expansion that will triple their capacity once completed. The two berths can currently load 2 million tons of grain per year and that will increase to 6.5 million tons when completed. After six months of work, the R$ 177.5 million project is 20% complete.

The berths will be retrofitted with newer and faster ship loaders with higher capacities as well as new and faster conveyor systems. The draft at the berths and the shipping channel leading to the port will be dredged deeper in order to accommodate larger vessels. The new ship loaders will have an extended reach allowing the loading of 80,000 ton vessels. The current limit is 60,000 ton vessels. The project is scheduled for completion in March of 2020,

Eventually, an additional berth will be added to the Public Corridor. This additional berth has been a dream of port officials for 40 years. When all these projects are complete, the port's capacity will be increased by 25% and the loading of vessels will be faster and cheaper, which will help to offset what is sometime called the "Brazil Cost." The "Brazil Cost" is the higher cost of transporting and exporting grain out of Brazil due to the inadequate infrastructure.

The Port of Paranagua is also under pressure to improve its operations due to improvements in Brazil's "Norther Arc' of ports. These are new or existing ports on the Amazon River and along the northern Atlantic Coast that have also been undergoing expansion and modernization. Officials at the Port of Paranagua realize that the port needs to reduce its costs and improve its efficiency in order to stay competitive with the ports in northern Brazil.