Brazil Eyes Northern Export Corridor

Brazil Eyes Northern Export Corridor

Exporting soybeans out of the Amazon is tricky.

I grew up near enough to the Mississippi River that I still miss a catfish sandwich (fried fish on a piece of Wonder Bread) bought in those dark old taverns down by Grafton, Ill. But you ought to see the size of the fish they've got in the Amazon, over where the Maggi floating export terminal was loading beans last week.

Tied up at the port last week were oceangoing ships, loading with soybeans bound for Europe. Imagine Panamax freighters sailing up to, say, St. Louis, to load. That's what they do near Manaus.

Maggi port on the Amazon River. Photo by James Thompson

Yep. Once you get your beans up to the Amazon, shipping them out to world markets is a breeze. The problem is getting them there—or to some other more northerly Atlantic port. Right now, most exported soybeans from the top-producing state of Mato Grosso travel a thousand miles or more by eighteen-wheeler to reach one of Brazil's two main export ports—Santos or Paranaguá.

From there, most of the time, the beans and products head back north on the water: northeast to Europe, or northwest to the Panama Canal, retracing those 1,000 miles and more. It's expensive. In fact, the head of one major Ag organization estimated that having an export corridor through Brazil's north, to the Atlantic, would cut the cost of shipping a bushel of soybeans by 13%.

So as the Mato Grosso Ag economics institute announces that 65% of the state's bean crop has been harvested, about a third of those beans will go by rail to a southern port. About half will be driven on semis over two-lane roads. Most of the remaining 16% will be driven to barges on an Amazon tributary and loaded up. They will scuff and scrape along the bends of the Madeira River, through native reservations, and transfer their cargos to oceangoing ships at the terminal near Manaus.

Production moves north

After all, soybean production, which was once limited to Brazil's south, is moving that direction anyhow.  It's reported that 52% of the nation's corn and bean production now lies north of the 15th Parallel. As late as 2001, that number was more like 32%.

There are a couple of Amazon ports, and they represent a clever, if limited, response to the transport problem faced by Brazilian agriculture. But the new phase to overcome transportation challenges, will likely be to avoid the wrath of environmentalists and native peoples by bypassing the Amazon River altogether, and heading straight to ports like Itaqui, on the Atlantic.

I'm betting that that's where I'll be headed in years to come in order to see Brazil's ag exports loading, rather than down to the traditional southern ports, or the floating Amazon ports like the one near Manaus.

Brazilians will welcome the savings, but I'll miss the river fish.

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