Industry

Heavy Rains Close Key Brazilian Soybean Corridor

Heavy rains in February have resulted in the temporary shutdown of Brazil’s largest roadway – BR-163 – that has prevented shippers from moving soybeans from major-producing area Mato Grosso to ports on the Amazon River for eventual shipment to export loading facilities in ParáState.The problem began in late-February and has continued into early March before culiminating in a section of the highway being closed on March 3rd.

Brazil’s Infrastructure Minister Tarcisio Freitas told reporters in late-January that the government would likely put out bids up for private auctions with completion of paving the remainder of BR-163 along with another strip of roads going from the highway to the river port of Miritituba to come by the end of 2019. The corridor connects Mato Grosso, which according to the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service accounted for nearly 30 percent of soybean output in 2015, with the major northern inland ports of Itaituba and Santarém. From these ports along the Amazon River, the beans are eventually exported.

According to USDA’s Agricultural Marketing Service’s Soybean Transportation Guide: BRAZIL 2017, about 60 percent of Brazil’s soybeans move via trucks, and as of October 2017, there were two key sections of the road that were unpaved, including the remaining 62 miles that span from northern Mato Grosso to southwestern Pará. The report noted that conditions in 2017 slowed transport to three days to complete the stretch and this travel time was to be cut in half once paving was complete. The current situation, however, is not only one of delays, but traffic on the highway is reportedly at a standstill. As a result of this ongoing logistical snafu, Brazilian soybeans will have to find alternative paths in order to reach export facilities to fulfill commitments in a timely manner.

Rob Hatchett
Rob Hatchett

Senior Economist

Farm Journal Media