Brazil outshines US in soybean export competitiveness, says CEO of Rumo

Brazil has outperformed the United States in terms of soybean competitiveness, calculated in dollars per ton of products transported, in shipping soybeans to China in the first half of 2022, said the executive president of Rumo, João Alberto de Abrey, during the AgroForum event promoted by BTG Pactual on Thursday, Sept. 29.

He proposed comparing the costs of transporting a ton of grain from Mato Grosso, Brazil’s main production hub, with the costs of the “Corn Belt” region in the US, which uses the Mississippi River as the main flow route to ports.

“Brazil has promoted itself to be the most competitive in shipping agribusiness products to their destinations. Here I refer to China, the main market…,” said the executive representing the leading rail logistics company in the country.

See below the track record of the volume of soybeans (HS 1201) exported by Brazil to China from January 2019 to July 2022. Data are from DataLiner.

Soybean Exports to China | Jan 2019 – Jul 2022 | WTMT

Source: DataLiner (click here to request a demo)

The United States is a traditional rival of Brazil in the export of soybeans and corn. In the case of oilseeds, Brazilians lead in production and foreign sales, while the USA is in second place. As for maize, the North Americans maintain global leadership, while the South American country is the second in terms of exports.

According to Abreu, the most discussed topic in the country is how to expand this leadership.

“Brazil is among the leaders in productivity, but also in logistics… we outperformed the United States, which is quite important, given the huge number of investments made in recent years,” he said.

“So, the country can no longer say that, from the farm’s gate and beyond, it is not competitive,” added Abreu.

Abreu also recalled that Brazil has recently taken the lead in global grain trading between countries and that it enjoys more leeway than the US to expand its leadership.

The Americans already occupy much of their arable land.

“Since the international context provided a chance for Brazil to extend its leadership in global trading and continue to feed the globe, we strived to construct a competitive infrastructure,” he said, adding that government policies encouraged investments as well.

He said that Rumo aims to be “the most competitive in the areas it operates” and recalled that the railroad expansion in Mato Grosso towards the north of the state should begin this year.

Despite highlighting logistical improvements, he admitted that the country still has a relatively small rail network, which opens room for opportunities.

“We are going to start expanding the railroad towards the north of Mato Grosso, which only has 300 km of railroads, where 40% of Brazilian grain exports originate. Rumo will add another 700 km of train tracks railroads, totaling a thousand kilometers to reduce travel distances,” said him.

The war in Ukraine, “a sad event for the world,” said the executive, will, on the other hand, bring opportunities for agribusiness in Brazil, given the rearrangement of global supply chains.

Source: Isto É Dinheiro

To read the full original article, please go to: https://www.istoedinheiro.com.br/brasil-supera-eua-em/

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