February 27, 2017
Barges on Amazon Running Out of Soybeans - Problems on BR-163
More and more of the soybeans produced in Mato Grosso are heading north to export facilities in northern Brazil instead of the traditional ports in southern Brazil. In fact, a recent report issued by the Minister of Agriculture indicated that 24% of Brazil's soybean exports in 2017 will be exported through the "Northern Arc" of ports along the Amazon River and the northern Atlantic coast of Brazil and that 75% will be exported out of the traditional southern ports.
The problem with shipping soybeans north out of Mato Grosso is the fact that the only way to get soybeans to the ports on the Amazon River from most of Mato Grosso is along highway BR-163. Unfortunately, the project of asphalting the highway from the city of Sinop in northern Mato Grosso to the port city of Miritituba on the Tapajos River is behind schedule and 180 kilometers of the highway are still essentially a dirt road.
Recent heavy rains have made the unimproved section of the highway nearly impassable. The normal flow of trucks carrying soybeans north along BR-163 is approximately 800 per day, but since February 14th, the flow has been reduced to 100 or fewer per day. There are reports of 4,000 to 5,000 trucks being stuck in a 50-mile long traffic jam due to the nearly impassable conditions.
There are reports that tractors must pull each truck through a five-kilometer section one at a time. Drivers are saying that it now takes 14 days to travel 1,000 kilometers on BR-163 (620 miles). In that period of time, a truck could have made a round trip carrying soybeans to the Port of Santos or the Port of Paranagua in southern Brazil.
There are barging operations at the port city of Miritituba that have run out of soybeans due to the traffic problems on BR-163. The soybeans that are loaded on barges at Miritituba are destined for ports near the mouth of the Amazon River. The Port of Santarem on the Amazon River also runs the risk of running out of soybeans as well because some of the soybeans exported out of Santarem arrive at the port along highway BR-163. The remainder of the soybeans are barged to the port from further upstream on the Amazon.
As a result of the traffic problems on BR-163, it is estimated that shipping companies are losing US$ 400,000 per day in demurrage charges and lost business because they cannot load vessels. It is estimated that the ports of Miritituba and Santarem will export 7 million tons of soybeans and corn in 2017, but that estimate may be optimistic given the problems along BR-163.
The highway project is the responsibility of the federal government and there were emergency meetings held late last week in Brasilia between transportation officials and the Brazilian President on how to resolve the issue. The problem is temporary and it will be resolved, but it is another illustration of how Brazil has struggled to improve its infrastructure.