Brazil Mato Grosso-Amazon Link Would Cut Soybean Transport Costs

Brazil could save 2 billion reais ($1 billion) a year in grain transport costs by setting up a barge connection between northern Mato Grosso state and ports on the Amazon River, according to Soybean & Corn Advisor Inc.

The government will fund a feasibility study of a route via the Teles Pires River that starts in Mato Grosso and the Tapajos River, which joins the Amazon at the city of Santarem, Soybean & Corn Advisor wrote in an online report today.

Two-thirds of Mato Grosso’s grain is transported by truck to ports in southern Brazil and almost a third is transported by rail the the port of Santos, with “very little” shipped by barge, according to the Hinsdale, Illinois-based consulting company led by Michael Cordonnier.

“The study will look at the engineering needed for locks to overcome the drop in river level as well as the economics of the projects and environmental hurdles that must be overcome,” Soybean & Corn Advisor wrote.

Aprosoja, the Mato Grosso soybean and corn producers association, estimates the cost of shipping a metric ton of soybeans from the north of the state to a port would fall to 60 reais from 227 reais now, the consultant wrote.

Transporting part of Mato Grosso’s harvest north instead of south would also help ease “chronic congestion” at Brazil’s southern ports, Soybean & Corn Adviser wrote.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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