Mar 26, 2010
Completion Of Highway BR-163 Will Allow Soybeans To Move North To The Amazon River
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Soybean farmers in Mato Grosso are anxiously awaiting the completion of highway BR-163, which connects Mato Grosso and the Amazon port city of Santarem. When it is completed at the end of 2011, it is estimated that shipping soybeans north instead of south to ports in southern Brazil will save approximately US$ 30 to US$ 35 per ton or about one dollar per bushel.
Currently, most of soybeans that are exported from Mato Grosso go out either the Port of Santos located in the state of Sao Paulo or the Port of Paranagua located in the state of Parana. One of the principal soybean-producing municipalities of Mato Grosso is Lucas do Rio Verde located in central Mato Grosso. From that municipality to the port of Paranagua in southern Brazil is a distance of 2,200 kilometers. From the same location north to the Port of Santarem is a distance of 1,150 kilometers. Not only will the trip northward be shorter, it will also be faster per kilometer because the trucks will be traveling on a brand new highway with less traffic compared to the southerly route where the highways are in terrible condition and the traffic is intense.
This new export route is expected to spur additional soybean production especially in the northern part of Mato Grosso.
Farmers will eagerly abandon the practice of sending their soybeans to the Port of Paranagua not only because it is more expensive, but also because state officials in Parana have fought long and hard to keep GMO soybeans out of their facilities. The federal government eventually ordered them to accept GMO soybeans, but they instituted a series of onerous identity preserved regulations that add to the shipping costs.
Not only is transporting soybeans with trucks the most expensive way to ship soybeans in Brazil, it is also results in the highest transportation losses as well. A recent study completed in the state of Parana estimates that one million tons of grain per year is lost from the trucks just in that state alone. It's the combination of bad roads and trucks not properly configured to haul grain that leads to the losses. During the harvest season, it is a very common sight in Brazil to see soybeans dribbling out the back of trucks as they travel down the highway and for the side of the highway to be covered with soybeans. IGBE estimates that 10% of Brazil's grain production is lost during harvesting, transporting and exporting.