Recently, when analyzing data on Brazilian international trade, we were pleasantly surprised. The ports of Arco Norte are already the second largest mover of soybeans for export in Brazil. From a mere promise a few years ago, they have already exported 9,6 million tons of soybeans between January and September 2016, which represents 19% of all soybeans exported by Brazil in that period. Santos follows in the lead, with 29%.
Figure 1 – Barge carrying soybeans by waterway
Source: Amaggi
The analysis took into account the movements of the ports of Barcarena (PA), Santarém (PA), Manaus (AM), Santana (AP) and São Luís (MA), the main ones to make up Arco Norte. For the first time, they were ahead of the port of Rio Grande (RS) which, since 2013, was the second largest exporter of soy in the country. Between January and September 2016, Rio Grande transported 8,8 million tons, or 18% of exported national soybeans.
As expected, in absolute numbers, the growth of Arco Norte ports has not caused a reduction in the volume of soy transported by Santos, Paranaguá and Rio Grande, traditional exporters of the grain. Between 2011 and 2016, the three ports also showed growth in exports, mainly Santos and Rio Grande (average of 13% and 12% per year, respectively), while Paranaguá had an average growth of 5% per year
The changes, however, happened in market share. While the ports of Arco Norte saw their participation grow from 13% to 19% in the period, Paranaguá was the one that most felt the drop, going from 21% of the market to 15%. In these five years, Santos registered a small increase, while Rio Grande practically stabilized at 18%.
Figure 2 – Participation of ports in Brazilian soybean exports
Source: ILOS
A good way of trying to understand this change in soy flows for export is to analyze the movement of Mato Grosso, a state that accounts for more than 30% of soy sold in Brazil, in the last two years. Since 2014, the year in which Miritituba and Barcarena started operating, there has been a tendency to reduce the shipment of soy from the region to most Brazilian ports, with the exception of Santos and Arco Norte. In one of the most emblematic cases, Paranaguá, which shipped 1,5 million tons of soybeans from Mato Grosso in 2014, received “only” 620 thousand tons until September of this year.
On the other hand, Mato Grosso has already sent, until September 2015, 5,7 million tons of soy to Arco Norte, double the volume of 2014, while Santos received 7,1 million tons. If this pace is maintained, the trend is that, in the coming years, Arco Norte will surpass Santos and become the main route for exporting soy from Mato Grosso.
The question, however, is about the infrastructure in the region. As much as investments have been made in Miritituba to expand the flow through the Tapajós waterway, access to the city of Pará still depends on the BR-163, whose state is still precarious in Pará. The expectations of the trades are for the construction of Ferrogrão, the railroad that would connect Sinop (MT) to Miritituba and that was included in the Investment Partnerships Program (PPI) of the Temer Government. However, if the schedule is not delayed, the railway should only be operating around 2023.
Although the train will still take some time to reach Miritituba, the trades continue their investments in the North of Brazil. In September 2016, Cianport started exporting soybeans through the port of Santana (AP), which has the capacity to handle 1,8 million tons. In addition, the company is building a second terminal in Amapá, with the structure to transport 3,5 million tons. Amaggi has just purchased 50% of Bunge's terminals in Miritituba and Barcarena, while Glencore and ADM intend to move around 3 million tons of the next harvest through their new terminal, also in Barcarena.
References:
<http://www.cargonews.com.br/%EF%BB%BFwilson-sons-agencia-participa-do-primeiro-embarque/>
<http://www.abag.com.br/sala_imprensa/interna/abag-escoamento-de-graos-pelo-norte>
Alexandre Lobo
https://ilos.com.brGraduated in Civil Engineering from the Federal University of Rio de Janeiro (UFRJ) and in Social Communication from Faculdades Integradas Hélio Alonso (FACHA). Expertise in several projects with emphasis on market analysis for companies such as Unilever, Intertank, Invepar, Aqces, Inter-American Development Bank and World Bank.
