Top grain traders consider BR-163 highway venture

According to logistics and infrastructure development firm EDLP, the world’s top four agriculture traders and Brazilian rival Amaggi are mulling over a joint bid to operate the BR-163 Highway and considering investing in the Ferrogrão Railway. Archer Daniels Midland Co (ADM), Bunge Ltd, Cargill Inc, Louis Dreyfus Co (LDC) and Amaggi have commissioned EDLP to conduct a study on the potential venture.

28% of Brazil’s soybean and corn exports are exported through the northern ports, via the BR-163 highway. Grains trucks from Mato Grosso and surrounding areas unload cargo at Miritituba River Port in Pará, which is then sent in barges to Barcarena Port. Shippers prefer the Port of Barcarena due to its proximity to the Panama Canal, reducing the distance to export to Asian countries, such as China, as well as the USA and Europe.

According to an EDLP spokesperson, the proposed model and the plan to privatize the highway is expected to be submitted to the government this week. The proposal would recommend the government sanctioning a shorter 10-year period concession instead of the typical 20 to 30 year tenure projects, facilitating migration to the Ferrogrão Railway which is expected to start operating in 2025. The government plans to accept bids on the Ferrogrão rail project later this year or in early 2020. The railroad, which is also likely to attract investment from the top grain traders, will run on a similar route to BR-163.

DatamarNews reported both Barcarena and Miritituba river ports were in danger of running out of soybeans last Friday due to a 10-day long emergency repair road-blockade. The following tweet shows the latest development on the matter:

O trabalho do @exercitooficial, do @DNIToficial e da @PRFBrasil no trecho final da BR-163/PA não para. Para facilitar o planejamento dos caminhoneiros, foi feito um esquema de rodízio liberando o fluxo nos dois sentidos:
Sentido Norte: de 7h as 15h.
Sentido Sul: de 17h30 as 3h.

— Ministério da Infraestrutura (@MInfraestrutura) March 12, 2019

Sharing is caring!