January 26, 2012

Three Grain Terminals now on Ferronorte Railroad in Mato Grosso

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

America Latina Logistica (ALL) currently operates three grain terminals within the state of Mato Grosso. The terminals are located at Alto Taquari located about 15 kilometers within the southeast corner of the state, Alto Araguaia about 75 kilometers within the state and a new terminal at Itiquira about 150 kilometers within the state. The terminals at Alto Taquari and Alto Araguaia have been operational for a number of years and the terminal at Itiquira will be inaugurated in March.

ALL has recently invested R$ 2.4 million to expand the unloading capacity of the two existing terminals. The terminals previously had the capacity to unload 700-800 trucks per day, but that was woefully inadequate for the crush of trucks trying to unload at the peak of the soybean harvest. Truckers were required to wait days without any provisions for food or sanitary facilities before they were allowed into the terminal to unload. With the current expansion completed, the goal now is to be able to unload 900 trucks per day at the existing terminals. ALL has also invested in better infrastructure to meet the needs of the truckers using the terminals.

The terminal at Itiquira is scheduled to begin operations in March. The rail line arrived at the terminal last September, but the terminal will not be full operation until an access road (MT-299) is asphalted. MT-299 links the terminal with the main highway (BR-163, which is sometimes called the soybean highway) that runs north-south through the center of Mato Grosso. Currently 10 kilometers are asphalted and there are 26 kilometers yet to go. The terminal at Itiquira has the capacity to move 2.5 million tons of grain per year in addition to soybean oil, ethanol, pulp wood, refrigerated containers and petroleum products.

The plan is to now extend the rail line to the city of Rondonopolis (112 kilometers away) by the end of 2012 where the largest grain terminal in Brazil will be built. Preliminary constriction has already started on the grain terminal in Rondonopolis and when completed, it will allow soybeans from all reaches of Mato Grosso to be shipped by rail to the Port of Santos in southeastern Brazil.

Due to the lack of competing railroads within the state, farmers will not see much of a financial benefit from shipping by rail. Currently, shipping rates on the rail line are only about 3% cheaper than shipping the grain by truck to the ports in southern Brazil.

The long term plan is to further extend the rail line from the city of Rondonopolis to the state capital of Cuiaba (210 kilometers) and then eventually straight north to the Amazon River which is approximately 1,500 kilometers north of Cuiaba.