Apr 27, 2010
Lack of Adequate Infrastructure Highlighted Again In Mato Grosso
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Farmers in Brazil are wrapping up the harvest of a record soybean crop and as they do, the lack of adequate infrastructure to handle such a large crop has once again has become evident in Brazil. Farmers in central Brazil have been asking the federal government to accelerate the construction of railroads and barging operations to facilitate the movement of grain from the interior to Brazilian ports. Currently, about two thirds of the soybeans and corn shipped out of the state are transported via truck. Even if the grain is shipped via rail, the grain must be trucked long distances to reach the only two rail terminals in the state. The state of Mato Grosso is as large as six Illinois put together.
In Mato Grosso for example, America Latina Logistica (ALL) operates the only two rail terminals on the Ferronorte Railroad in Mato Grosso. They are located at Alto Taquari and at Alto Araguaia, both of which are located in the far southeastern corn of the state. One terminal is about 10 miles inside the state and the other is about 50 miles inside the state. During the peak of this year's soybean harvest, the line of trucks waiting to unload their soybeans at the Alto Araguaia terminal stretched for up to 10 kilometers along the highway and some truckers had to wait four days to unload.
As bad as that sounds, it is an improvement over what was the situation in 2009. Over the past year, ALL invested R$ 11 million to expand the capacity of the terminal from being able to accommodate 400 trucks per day in 2009 to 600 trucks per day in 2010 (each trucks carries approximately 37 tons of soybeans). ALL officials indicated that once the railroad extends further into the state, other terminals will be added and the congestion at the existing terminals will be resolved. The problem is that no new track has been laid for eight years and there are doubts about ALL's ability to continue building the railroad. In fact, there is a move in the Brazilian Congress to strip ALL from the right to continue building the railroad although nothing has been resolved as yet.
The Ferronorte Railroad's goal is to transport 8 to 10 million tons of grain in 2010, but in order to achieve that goal, significant improvements in their operations need to be accomplished, none of which have come to fruition as yet.