May 20, 2019

Logistical Challenges for Grain Exports from Mato Grosso, Brazil

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

Mato Grosso is the largest grain producing and exporting state in Brazil, but it is located in the center of South America which leads to a lot of logistical challenges for grain exports. The map below shows the state of Mato Grosso in grey and the current and proposed transportation routes for the movement of grain to export facilities. In the past, almost all of Mato Grosso's grain was exported from the Ports of Santos and Paranagua in southern Brazil, but that is changing with the "Northern Arc" of ports in northern Brazil.

This map is from the Mato Grosso Institute of Agricultural Economics (Imea) and the title is "Movement of Grain Exports." The legend is as follows:

  • Red lines - Highways that are operational
  • Red-dash lines - Projected or incomplete highways
  • Green lines - Railroads that are operational
  • Green-dash lines - Projected or incomplete railroads
  • Blue lines - Waterways where barging is operational
  • Blue-dash lines Projected or incomplete waterways
  • Small green square - Grain terminals that are operational
  • Small red square - Projected grain terminals
  • Large blue square - Ports that are operational
  • Large red square - Projected ports

There are some very ambitious long range projects on this map. The easiest and cheapest projects would be highway improvements and expansion and in fact, some of highway projects are currently underway. The expansion of the railroad network is going to be expensive and time consuming. The expansion of the waterway network is the most far reaching and in my opinion, the most dubious.

There are proposals to build more than 100 hydroelectric dams in the Amazon Region, but none of those plans account for the possibility of barging operations on the rivers. Additionally, the few dams that have already been built in the region have been highly controversial and opposed by indigenous communities, environmentalist, etc. These dams have already had a detrimental impact on the health of the river and its environment.

In my opinion, putting dozens of dams on the southern tributaries of the Amazon River would be a very big mistake. Those dams would alter forever the nature of the river and the surrounding environment not to mention the people who depend on the river for their livelihoods

I think a much better alternative would be solar energy. The sunlight in the Amazon region of Brazil is very intense since it is very near the equator. With the rapid advancements in solar energy and storage technology, it would seem to me that solar energy would be a much better alternative than over a hundred hydroelectric dams. Besides, it would take many decades to build those dams (if ever), how much further advanced would solar energy be by then?