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June 7, 2016

New Port of Itaqui in Northeastern Brazil Surpassing Expectations

The first year of operations of the largest new port in northeastern Brazil has surpassed expectations. The Atlantic Ocean Port of Itaqui is located in the city of Sao Luis in the state of Maranhao just south of the mouth of the Amazon River. The actual port has been in operation for many years exporting mainly iron ore to China. What is new at the port is the Tegram Grain Terminal, which started operating in early 2015.

This new grain terminal is the largest of what is known as the "Northern Arc" of ports which includes ports on the Amazon River as well ocean ports in northeastern Brazil.

The main advantage of this port is that it is already served by the North South Railroad that transports grain from northeastern Brazil as well as eastern Mato Grosso. It is the only port in the Northern Arc that is serviced by a railroad. Eventually, it is expected that 80% of the grain arriving at the port will be by rail.

CGG Trading is the first company at the Tegram Grain Terminal at the port to export soybean meal. During the first semester of 2015, the terminal exported 3.4 million tons of grain with CGG Trading moving 32% of the total. CGG Trading exported 190,000 tons of soybean meal in 2015 and that has expanded to 200,000 tons of meal during the just the first four months of 2016. The soybean meal originates from crushers in the states of Maranhao and Tocantins and is destined for European markets. The Tegram Grain Terminal is the best option for soybean meal exports from northern Brazil.

The first phase of the new port has the capacity to export 5 million tons of soybeans, corn, and soybean meal per year. Work on the second phase is expected to start before the end of 2016 and when completed in early 2018, the capacity of the port will expand to 10 million tons per year. That would make the Port of Itaqui the third largest grain export facility in Brazil after the Port of Santos and the Port of Paranagua.

When the entire system of ports in the Northern Arc of Brazil are up and running, they are expected to handle half of Brazil's grain exports, which will provide a cheaper alternative to exporting grain out of Brazil's southern ports.