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October 29, 2020

Completion of BR-163 Lowers Freight Costs out of Mato Grosso

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

With the completion of Highway BR-163 from northern Mato Grosso to the Port of Miritituba on the Tapajos River in northern Brazil, exporting grain out of Brazil's "Northern Arc" of ports is no longer considered an alternative to Brazil's southern ports, but the solution to the ever expanding grain production in central Brazil.

The superintendent of a Logistical Operations for Conab, Thome Guth, released a Logistical Bulletin from Conab that indicated that the cost of transporting grain from northern Mato Grosso to ports on the Amazon River declined 11% upon completion of Highway BR-163.

Prior to completion of BR-163, this major highway north out of Mato Grosso was plagued by impassable conditions during the peak of the rainy season. Truckers never knew how long it would take to reach the port because they might be forced to wait for days or weeks at a time while the highway was repaired. With the entire stretch now paved, the trucking companies can charge less because they know how long the trip will take and what their costs will be.

The Port of Maritituba is one of the Northern Arc of ports in Brazil that includes: the Port of Santarem in the state of Para, the Port of Porto Velho in the state of Rondonia, the Port of Itacoatiara in the state of Amazonas, the Port of Barcarena in the state of Para, and the Port of Itaqui in the state of Maranhao.

Traditionally, grain produced in central Brazil was exported out of the Ports of Santos and Paranagua in southeastern Brazil, but Brazil's northern ports are quickly taking away market share from the southern ports. This trend is expected to continue as the infrastructure improves in northern Brazil and these various ports expand their capacity as well as their efficiency.