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November 20, 2015

Brazil's New Port of Itaqui Surpassing All Expectations

The new grain terminal at the Port of Itaqui in the city of Sao Luis, which is located on the northeastern Atlantic Coast of Brazil, is surpassing all expectations for its early operation. The Grain Terminal of Maranhao (Tegram), passed the 3 million ton mark for grain and soybean meal exports earlier this week and it is now expected to export 50% more grain during its first ten months of operation than earlier expected.

The Tegram grain terminal started operations in March of this year and was expected to export 2 million tons of grain by the end of 2015. In September, the estimate was revised higher to 3 million tons and that number was achieved on November 9th.

According to the National Association of Grain Exporters (Anec), in only nine months of operation, the Port of Itaqui is already the fourth largest grain exporting facility in Brazil behind the ports of Santos, Paranagua, and Rio Grande, which are all located in southern Brazil. After the second phase of construction is completed, the Port of Itaqui could be the third largest grain exporting facility in Brazil just behind second place Paranagua.

There are four grain warehouses at the Tegram Grain Terminal operated individually by NovaAgri, Glencore, CGG Trading, Amaggi, and Louis Dreyfus. By early November, the port had already loaded 52 vessels with 2.14 million tons of soybeans, 754,000 tons of corn, and 138,700 tons of soybean meal.

The early success of the port has encouraged port officials to accelerate their expansion plans to add a second berth by the end of 2017. Once the expansion is complete, the capacity of the port would increase from its original 5 million tons to 10 million tons.

The Port of Itaqui is the most important new development in what is called the "Northern Arc" of ports in Brazil. This includes new or expanded ports on the Amazon River and along the northeastern Atlantic Coast of Brazil. The Port of Itaqui is important because it can accommodate larger deep-water vessels compared to the ports along the Amazon River. The Port of Itaqui is already serviced by a railroad that transports iron ore to the port and it is expected that 80% of the grain exports will arrive at the port by rail, which is by far the highest percentage of any port in Brazil.

These Northern Arc of ports will reduce the transportation costs for soybeans produced in central and northeastern Brazil and they will help to relieve the chronic congestion experiences at Brazil's southern ports.