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September 24, 2018

Producers in Mato Grosso push for construction of Railroad

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

To the frustration of farmers in Mato Grosso, there continues to be discussions about building additional railroads in Mato Grosso, but the money to actually build the railroads never seems to materialize.

That was the case again last week when the Agriculture and Livestock Confederation of Mato Grosso (Famato) participated in a public hearing at the National Land Transportation Agency (ANTT) in Brasilia concerning the construction of what is called the Integrated Center-West Railroad (FICO).

The first phase of the proposed FICO railroad would link the state of Goias with eastern Mato Grosso. The 383 kilometer stretch would start at the city of Campinorte in Goias and extend to the city of Agua Boa in eastern Mato Grosso. It is envisioned that eventually the railroad would extend across Mato Grosso east-to-west into the state of Rondonia and terminate at the city Porto Velho on the Madeira River in Rondonia.

In Goias, the railroad would link to the North-South railroad where grain could be shipped from eastern Mato Grosso to the Port of Sao Luis on the northeast Atlantic Coast of Brazil. The deep water port at Sao Luis already exports most of Brazil's iron ore and it has been expanded in recent years to accommodate grain exports as well. Once fully implemented, the port at Sao Luis will be able to export more than 10 million tons of grain annually making it the third largest grain port in Brazil after the Port of Santos and the Port of Paranagua.

The railroad is considered essential for reducing the transportation cost for grain produced in eastern Mato Grosso which represents 32% of the grain production in Mato Grosso. The Mato Grosso Institute of Agricultural Economics (Imea) estimates that by 2025, eastern Mato Grosso will produce 29 million tons of grain including soybeans and corn.

This railroad was first proposed back in 2009, but the money for construction has not been approved. A public hearing concerning the construction of the railroad will be held in the city of Agua Boa in eastern Mato Grosso on November 22.

The construction of additional railroads in Mato Grosso has been under discussion for years. One railroad would link northern Mato Grosso with ports on the Amazon River. The other railroad would be an extension of the existing railroad in southeastern Mato Grosso to the state capital of Cuiaba and eventually northward connecting with the railroad that would be built to the Amazon River. If all these railroads eventually do get built, there would be a continuous railroad north-to-south and east-to-west in Mato Grosso.