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March 8, 2017

Truck Freight Rates Surge in Mato Grosso

Farmers in Mato Grosso have harvested approximately 80% of their 2016/17 soybean crop and now is the peak demand for trucks to transport the soybeans to distant ports. This peak demand means that freight rates can peak as well and that is exactly what has happened over the past month.

According to the Mato Grosso Institute of Agricultural Economics (Imea), over the past 30 days, freight rates in Mato Grosso have increased from a low of 5-6% to a high of 23%. In early February, it cost R$ 235 to transport a ton of soybeans by truck (approximately $2.04 per bushel) from the city of Sorriso in central Mato Grosso to the Port of Paranagua in southern Brazil. In early March the cost of moving that same ton of soybeans increased 16% to R$ 285 (approximately $2.48 per bushel).

The cost to move a ton of soybeans by truck from eastern Mato Grosso to the Port of Santos is now R$ 260 (approximately $2.26 per bushel), which represents an increase of 15% in thirty days. In western Mato Grosso it now cost R$ 138 per ton (approximately $1.20 per bushel) to transport soybeans from the city of Sapezal to the port of Porto Velho on the Madeira River, which is a 6% increase over the past month.

These high costs of transportation are why farmers in Mato Grosso are so anxious to complete the paving of highway BR-163 from Mato Grosso north to the Amazon River. There are also plans to build a railroad from Mato Grosso to the Amazon River as well. When these projects are complete, the cost of transporting soybeans from Mato Grosso to ports on the Amazon River will be 40% cheaper than transporting the soybeans to southern ports.