May 26, 2015

Amount of Soybeans Barged down Madeira River Increasing

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

The biggest problem for farmers in central Brazil is that they are 2,000 kilometers away from the nearest export facility and the cost of moving the grain to those facilities could be as high as two dollars per bushel. The most economical way to transport grain is by barge and progress is being made on increasing the amount of Brazilian grain that is being barged to export facilities.

One barging operation that is already operational is on the Madeira River in the state of Rondonia. Both Cargill and Amaggi have operated barge loading facilities in the city of Porto Velho, Rondonia for a number of years, but they are outgrowing their downtown location.

Amaggi has built a R$ 400 million barge loading facility 20 kilometers outside of the city in order to relieve truck congestion in the downtown location. The new Organized Port facility is currently undergoing testing and when fully operational, it will handle 1.5 million tons of grain per year. It will also be able to handle containers which will facilitate the export of meat products produced in central and western Brazil.

The original downtown Hermasa Port would only accept conventional soybeans (non-GMO) until two years ago. It will now accept conventional and GMO soybeans which remain segregated at the port. A small amount of conventional soybeans continue to be produced in western Mato Grosso to satisfy the demand for the product mostly by European buyers. The new facility will also accept both types of soybeans and they too will remain segregated.

The soybeans barged down the Madeira River are mostly produced in western Mato Grosso. The soybeans that enter the Amaggi facilities are barged to their export facility at Itacoatiara on the Amazon River where they are loaded onto ocean going vessels. Amaggi currently has 117 barges and that will increase as the new facility becomes operational. The soybeans that enter the Cargill facility are barged to their export facility at Santarem on the Amazon River where they too are loaded onto ocean going vessels.