Rains shut down Brazil’s main northern grain export road

The main grain highway BR-163, on which nearly 15% of Brazil’s corn and soybean exports flow to terminals in the Amazon basin state of Para, was cast into chaos over the weekend with the return of heavy spring rains.

Roughly 100 km of the 750 km stretch of the highway in Para state is unpaved and rains in recent days quickly made shipping grain from Brazil’s leading producer state of Mato Grosso by road to the terminals of Miritituba and Santarem in Para impossible.

Even paved segments of the highway were under water and unpassable.

BR-163 is scheduled to get its final paving in the coming year with the help of the army corps of engineers, but for now the road is expected to be unpassable for the coming weeks or until the spring rainy season abates.

Brazil is forecast to export 94mn tons of soybeans and corn from the current crop that was planted over the past few months and will start harvest in January. And the Agriculture Ministry estimates that nearly 15% of those exports will move through the northern port terminals this season.

The so-called northern arc of grain ports has exploded in recent years with investments in terminal construction and expansion from all the major traders such as Bunge, Cargill, ADM and Louis Dreyfus.

Miritituba, which began operations in 2014 started off moving 600,000 tons a year and has nearly tripled exports since then. The investments came after congestion moving grain through Brazil’s overstressed southern ports of Santos and Paranagua in recent years exposed fragility in the country’s export infrastructure.

But the northern arc is not without its challenges. A little less than a year ago, highway officials took weeks to free grain trucks that were stranded along BR-163 after rains caught them on segments of the highway.

Local weather forecasters Ipmet and Climatempo are forecasting rains to continue falling in the region for most of the next 10 days.

Edeon Ferreira, director of Pro-Logistica – an association that comprises trucking companies, farmers and trading companies, said the situation will be resolved next year with the creation of a task force that will map the problem areas of BR-163 and strengthen them to sustain heavy rains.

“The lesson has been learned and we are taking pre-emptive measures to avoid this in the future,” he said, adding that the highway is still expected to move 11mn tons of grain in 2018.

Brazil’s northern arc of ports, which includes the port of Itaqui in the state of Maranhao and others, is expected to move 31mn tons of grain in 2018 after jumping to 26mn tons in 2017 from 16mn tons the year before, according to Pro-Logistica.

Brazil’s agriculture minister, Blairo Maggi, said at an event on Monday that “40% of Brazil’s grain exports would be shipped through the country’s northern ports by 2028.”