New export facilities in Brazil’s “Northern Arc” of ports on the Amazon River and the northern Atlantic Coast could ship up to 35 MMT of grain this year, a 300% surge over the past five years, according to the National Grain Exporters Association. South American Crop Consultant Dr. Michael Cordonnier says that these ports have allowed Brazil to increase its grain export capacity “without the traditional long delays in getting the grain to the southern ports or long lines of vessels waiting to load.”
He explains that currently, the cost of moving grain north out of Mato Grosso to the Amazon River is about equivalent to moving grain south to Brazil’s southern ports, but that is about to change. “Paving of highway BR-163 from Mato Grosso north to the Amazon River is scheduled for completion before the end of 2019, and once completed, it will significantly reduce costs,” Cordonnier explains.
Another major infrastructure improvement is also on the horizon -- grain companies will soon be bidding on the right to build a railroad from northern Mato Grosso to the Port of Mirituba. These infrastructure improvements are increasingly positioning Brazil to better compete against the U.S. at a time when U.S. shipments to China are being reduced by its trade war with Beijing.