Jan 13, 2010
Brazilian Soybean Producers Want Northern Ports Expanded
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The 2009-10 Brazilian soybean crop could be a record crop, and if that does turn out to be the case, many producers in Brazil are wondering just how this huge crop is going to be transported and exported. Traditionally, soybeans produced in central Brazil are exported via the Port of Paranagua and the Port of Santos, both of which are located in southern Brazil. Transporting soybeans from central Mato Grosso to either of these ports can cost as much as US$ 2.75 to US$ 3.25 per bushel. Producers in Mato Grosso and the rest of central Brazil are looking more toward ports in northern Brazil or on the Amazon River as new alternatives to the traditional southern ports.
One of those ports already in operation in northern Brazil is the Port of Itaqui, which is located in the city of Sao Luis in the state of Maranhao. The state of Maranhao is an up and coming soybean producing state and this port is already handling approximately 2 million tons of grain per year. Soybean producers are pressing for the approval and full funding of an R$ 800 million project that would increase the capacity of the port to 13 million tons per year by 2013. The source of the funds would be from both the federal government and private investors.
Two other ports under consideration for expansion are both located on the Amazon River in the state of Para. The Port of Santarem is already exporting grain that has made its way via barges from western Mato Grosso. When the project to asphalt BR-163 is complete in several years, there will be a direct highway link from Mato Grosso to the Port of Santarem and the highway is complete, the volume of grain is expected to increase significantly. Another port on the Amazon River targeted for improvements is the Port of Vila do Conde, which is already in existence, but not set up to handle grain exports.
These northern ports are located closer to where the soybeans are produced and according to the Mato Grosso Soybean Producer Association; the cost of transporting soybeans out of Mato Grosso could be cut by 30-50% by using these northern ports as opposed to the ports in southern Brazil. Using these northern ports would also cut about four days off the voyage to transport Brazil's soybeans to their European customers.
Currently, these northern ports account for about 15% of Brazil's exports, but that could rise to 25% in ten or fifteen years if these expansion plans are approved.