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November 24, 2017

Backers Urge Brazilian President to Approve "Grain Railroad"

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

Backers of the new proposed railroad that would link Mato Grosso with ports on the Amazon River are urging President Temer to include the railroad in his new infrastructure investment plan. They contend that the proposed railroad should be a top priority for the government because it would lower the cost of transporting Brazil's ever increasing grain production to export facilities.

The 1,142 kilometer railroad would link the city of Sinop in northern Mato Grosso with the Port of Miritituba located on a tributary of the Amazon River. The proposed route would be parallel to Highway BR-163, which also links the two locations. The railroad would offer farmers in Mato Grosso a second and cheaper alternative for moving their grain to ports on the Amazon River instead of ports in distant southeastern Brazil. The proposed railroad is already being called the "Ferrograo Railroad" (the Grain Railroad).

If everything goes as planned, and that is a big if, bidding for the railroad would be completed in mid-2018 with construction starting in late 2018. It is estimated that construction would take five years to complete.

Indigenous communities, along with subsistent farm groups, gold mining groups, and other traditional communities are not on board with this project. The National Agency for Land Transportation (ANTT) wanted to hold public meeting concerning the project as soon as in December, but the Brazilian Federal Public Minister (MPF) recommended canceling the meeting, at least for the time being. His rational was that these meeting would be illegal without the consent of at least 19 indigenous communities along the proposed path of the railroad.

The state of Mato Grosso is the largest producer of soybeans, corn, cotton, and cattle in Brazil, but it has long suffered from high transportation cost getting the grain to export facilities. Currently, there is only one railroad servicing the southeastern corner of the state. There are proposals for railroads crossing the state east-to-west and south-to-north in addition to proposed barging operations, but as with most projects in Brazil, these projects seem to take a long time to get completed.