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March 5, 2019

Highway BR-163 closed in Northern Brazil due to Heavy Rain

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

It's that time of year again. For the third year in a row, there are traffic problems once again on the unpaved section of BR-163 just south of the Amazon River in the state of Para. Thousands of trucks and other vehicles heading north are reported to be stopped due to muddy conditions on a 10 kilometer unpaved section of the highway in a hilly area. It has been reported by So Noticias that truck drivers in the traffic jam indicate that it could be as long as 40 kilometers. Unfortunately, rains are expected in the region for at least another week or longer.

On Sunday, March 3, the National Department of Infrastructure and Transportation (Denit) and the Federal Highway Police (PRF) officially closed the highway on the border of Mato Grosso and Para. They are not allowing any trucks to enter the highway until the situation improved further north because there are no services available for any stranded truckers. Officials are hoping to reopen the highway sometime this week if the rains diminish.

The recent problems started on February 24th and for basically all of last week, the highway was stopped in both directions due to heavy rains leaving the unpaved section of the highway in a hilly area too slippery for trucks to climb the steep slopes (see pictures below). The Brazilian military, who is in charge of paving the highway, has restricted the movement of trucks to prevent the problem from getting worse and they are assisting trucks one-by-one to ascend the hills.

Highway BR-163 is the major highway linking the state of Mato Grosso with ports along the central Amazon River. At this time of the year there are about a thousand trucks per day going in each direction. The trucks heading north are generally carrying soybeans or corn depending on the time of the year. The trucks heading south are generally empty. Nearly all the grain exports from northern Mato Grosso now go out of ports on the Amazon River.

According to the daily bulletin from the National Department of Infrastructure and Transportation (Dnit), traffic is stopped in both directions as heavy equipment assists trucks up the hills. A limited number of fully loaded trucks heading north are allowed through on a daily basis. A greater number of empty trucks heading south have been allowed through.

Reporters from So Noticias interviewed truck drivers who have parked their rigs at truck stops so that they would not be stranded on the highway. They reported a very confusing and chaotic scene with even the truck stops running out of fuel and supplies. The situation is complicated by the fact that in some sections the trucks are parked 2 or 3 abreast blocking the entire road, which means it is impossible to bring in any additional heavy equipment or assistance for the stranded drivers. The region is sparsely populated, but local volunteers in the region are trying to help the drivers with food and water if possible.

The Minister of Infrastructure in Brazil and Dnit have worked together with the Brazilian Army to put together a program in an effort to minimize problems on BR-163. The program started on December 2nd and it will continue until May when the rainy season generally ends. They have set up three bases of operations in critical areas staffed with 900 workers and over 40 pieces of heavy equipment and over 40 vehicles from Dnit and the Brazilian Army to help control the traffic and assist trucks as needed.

Between the border with Mato Grosso and the Port of Miritituba on the Tapajos River, there are 707 kilometers of which 49 kilometers that have not been asphalted. Between June and October of last year, they did make some progress by asphalting 33 kilometers in the region. The remaining 49 kilometers (30 miles) are scheduled to be asphalted in 2019.

What does this mean for soybean exports from the Amazon ports? When this same problem occurred last year, the ports on the Amazon ran low on soybeans and about a dozen vessels were diverted to other ports instead of waiting for the problem to be resolved. There have not been any reports as yet of ports running low on soybeans. If loading of a vessel is delayed due to a lack of soybeans, the cost is about US$ 25,000 per day. If a vessel is diverted to the Port of Santos for example, it will cost approximately US$ 20 more per ton of soybeans. It takes approximately 2,000 trucks to load a typical 60,000 ton vessel.