January 31, 2013

Port of Porto Velho to Double Soy Exports, Start Beef Exports

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

One of the main export routes for soybeans produced of northern Brazil is through the Port of Porto Velho on the Madeira River in the state of Rondonia. From there, the soybeans are barged to the Amazon River where they are loaded unto ocean going vessels at the Port of Itacoatiara. The city of Porto Velho is in the process of building a new port eight kilometers outside the city that will double the amount of soybean exports and also divert grain hauling trucks from city streets. The city has already purchased the land and built an access road to the site.

The current port handles 4.5 million tons of soybeans per year through two grain terminals, one public and one private. The majority of the soybeans currently being exported through the port are produced in northwestern Mato Grosso and Rondonia.

The Andre Maggi Group has already indicated their intension to build a grain terminal at the new location with the capacity to handle 5 million tons of soybeans per year. Maggi's total investment in the new terminal is expected to be R$ 80 million.

Port officials are also planning to start exporting refrigerated containers of chilled beef through the port as well. They are in the final stages of installing the necessary equipment needed to load the containers. Currently, most of the beef exported from the state of Rondonia and Mato Grosso is exported out of the Port of Santos or the Port of Paranagua in southern Brazil, a distance of approximately 3,000 kilometers from the state. During the second semester of 2013, the port will start exporting 300 containers of beef per month, which will increase to 500 per month when fully operational.

The port has been working with the major beef processors in the region including JBS, Minerva, and Frigon to design to necessary facilities for loading the containers. JBS in fact, is the world'is largest beef processor with ten processing plants scattered throughout Mato Grosso and Rondonia. Russia is the number one purchaser of Brazilian beef, the second largest purchaser of pork, and the fifth largest of chicken.

The new port facilities are expected to greatly reduce transportation costs compared to trucking the grain and beef all the way to southern Brazil. It will also relieve some of the pressure at the Ports of Santos and Paranagua that suffer from chronic congestion and bottlenecks.