The competitive way out for Agribusiness in Brazil

Fiesp has just released its projections on Brazilian Agribusiness (Outlook Fiesp 2025) and, despite the current economic problems in Brazil, the expectation is for growth in national production over the next ten years. One of the main items in the Brazilian trade balance, the Soja Complex is expected to register a 34% increase in production in the period, which will demand even more from the country’s weakened cargo transport infrastructure.

No wonder, in a recent event organized by the newspaper O Estado de S. Paulo, the Summit Agribusiness Brazil 2015, sector players were concerned about how to efficiently dispose of national agricultural production. The theme is not new, the solution is already, in part, known, but concerns persist regarding its implementation.

In fact, in all the soy outflow models that we did at the ILOS, Brazilian production mostly increased when you opened up the capacity of the ports in the North region and made access to them feasible. The cut-off point was at the famous 16th parallel, close to the cities of Lucas do Rio Verde and Sorriso, the main production centers in the country. Everything that is produced above this parallel must be shipped through the ports in the North, with the remainder going mainly to Santos.

Current movement of grains to the North region via BR-163

Source: Valor Econômico

Note: as of December 2015, the paving work on the BR-163 to Pará was not completed

The difficulty, however, is in making the new projects viable. Two alternatives have developed in recent years, the river port of Miritituba (PA) and TEGRAM, in the port of São Luis (MA), but they alone do not solve the problem. In addition to completing the paving of the BR-163 and expanding the flow capacity of the grain terminals in the North, it is necessary to make it possible for grains to arrive at these terminals using lower-cost modes, such as rail and waterway. The most interesting project is that of Ferrogrão, which would take soybeans directly from the production center (Sorriso) to the port of Miritituba by rail, parallel to BR-163, but which is still only in the field of projects.

If everything goes as it never happened, it may be that, in 2023, we will already have the first grains going to the North by Ferrogrão. However, even Ferrogrão is not enough, and it is also important to solve the problems of access to Santos, mainly by rail. One thing is certain: it is necessary to invest and change! After all, transporting grain over long distances in the back of a truck is an absurd distortion, the bill for which has long been paid by Brazilians.