Brazil’s port operators seek lower Panama Canal fees

Brazil’s private port operators association, ATP, have developed a proposal to be presented at a conference in Panama City tomorrow, for using the idle capacity of the old Panama Canal instead of the congested large new locks opened in 2016 for Panamax ships. The aim of the proposal is to open the way for talks between Brazil and Panama to lower Panama Canal tariffs and cut costs in the transportation of agricultural commodities to China.

According to Reuters, ATP, including members Cargill Ltd and Bunge Ltd, will argue that moving grains from Brazil’s northern ports via the Cape of Good Hope in South Africa is almost US$206,000 cheaper on a per-ship basis, compared to navigating through the Canal, despite the shorter distance. ATP believes the plan will save journey times by 4-5 days and potentially reduce shipping costs.

“It is good for both sides because today Panama no longer receives a significant number of Brazilian grain ships bound for China due to the inexistence of a tariff agreement,” ATP executive director said in a statement to Reuters.

However, the tariff proposal negotiations with Panama have to be led by Brazil’s foreign affairs ministry after the Ministry of Agriculture has made the proposal. Brazil is the world’s largest exporter of agricultural commodities including soybeans, sugar, coffee, tobacco, orange juice, pulp, beef and chicken.

Last year in March a grain growers association in Mato Grosso, Aprosoja was able to reach a cooperation agreement with the Panama Canal Authority.

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