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July 12, 2017

Lack of Grain Jeopardizes Shipments out of Amazon River Ports

Barge operators at the Port of Miritituba on the Tapajos River in northern Brazil have had to cancel some of their loading due to a lack of corn and soybeans arriving at the port. The problem is a continued blockage of highway BR-163 from Mato Grosso by protestors upset by President Temer's decision regarding the size of a local forest preserve that would impact their livelihood.

According to representatives from the Brazilian Vegetable Oil Processors Association (Abiove), the situation at the port has gotten worse since the blockades went up last week. Some barges have already been canceled and more will be canceled soon if the situation is not resolved. Currently, corn loading are being impacted the most, but soybean loading are also being slowed.

Barges from the Port of Miritituba transport corn and soybeans to other ports near the mouth of the Amazon River where it is loaded onto ocean vessels. For the time being, the export terminals at the ports of Barcarena and Santarem still have enough supplies to continue loading vessels. The companies being hurt the most are the barge operators who must pay fines due to canceled shipments and broken contracts.

This is coming at a sensitive time for the corn exports. Farmers in Mato Grosso are in the midst of harvesting a record large safrinha corn crop and they do not have enough storage space for the crop. If they cannot transport their corn north to the Amazon River, the other alternative would be to pile it outside and move it at a later date or transport it at a higher cost to ports in southern Brazil. Conab released their July Crop Report yesterday indicating that the safrinha corn production in Brazil would set a new record at 65.6 million tons, which is significantly higher than last year's production of 40.7 million tons.

A trickle of grain is arriving at the port by diverting trucks to secondary roads. Most transport companies do not want to risk sending their trucks on these hazardous secondary roads. If the blockades persist, they will stop sending trucks north out of Mato Grosso and instead send them to ports in southern Brazil. Normally about 800 grain trucks head north on BR-163 on a daily basis.

Highway BR-163 is virtually the only route for grain shipments out of central Mato Grosso to ports on the Amazon River known as the "Northern Arc" of ports in Brazil. Blocking highway BR-163 for several days or longer is actually a relatively common occurrence. Various groups use this tactic to press for their cause either at the local level or at the federal level in Brasilia. When there is only one road, it makes for a tempting target in order to gain publicity for your cause.