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February 19, 2020

Inauguration of Completed BR-163, Brazil's "Soybean Highway"

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

Last week, the Brazilian President, Jair Bolsonaro, along with the Director of the National Infrastructure and Transportation Department (DNIT), the Governors of the states of Para and Mato Grosso, along with local dignitaries and politicians inaugurated the long delayed completion of Highway BR-163 linking northern Mato Grosso with the Port of Miritituba on the Tapajos River, which is a southern tributary of the Amazon River.

Work on the highway started in 1974 under the military regime and construction started and stopped over the past 45 years. The final paving of the last 51 kilometers was completed with the help of the Brazilian Army. BR-163 is one of the longest north-south highways in Brazil stretching 3,500 kilometers from the city of Santarem on the Amazon River to the city of Tenente Portels in the southernmost state of Rio Grande do Sul

The President of the Soybean & Corn Producers Association of Mato Grosso (Aprosoja/MT), Antonio Galvan, estimated that the completion of the highway has already lowered transportation cost to ports on the Amazon River by approximately $0.45 per bushel. Galvan estimated that currently 18% of Mato Grosso's soybeans are exported via the Port of Miritituba and that could increase to 25% by the end of 2020.

The Brazilian Association of Vegetable Oil Industries (Abiove) estimates that the paving lowered the truck transportation costs by approximately 20%. Abiove estimates that the current 10 million tons of grain exported out of the Port of Miritituba could increase to 20 million tons by 2025.

Before the paving was completed, truck drivers never knew how long it would take to get to the Port of Miritituba because of potential impassable conditions - it could be several days or it could be several weeks. Now the trip from the city of Sinop in northern Mato Grosso to the Port of Miritituba takes about 36 hours. Approximately, 6,000 trucks per day head north out of Mato Grosso on BR-163 carrying soybeans and corn to the Port of Miritituba.

During the inauguration ceremonies, the Governor of Mato Grosso and local mayors took the opportunity to promote other critical infrastructure projects in their state with President Bolsonaro. Their number one priority is the construction of the Ferrograo Railroad (Grain Railroad) linking Mato Grosso with the Port of Miritituba along with the Integrated Center West Railroad (FICO) which would connect Mato Grosso with the North South Railroad located in the neighboring state of Goias. He also pushed for the paving of Highway BR-158 which runs north and south along the eastern edge of Mato Grosso. This highway already carries 2,000 grain trucks per day.