Brazilian port push opens up big farm growth opportunities

Soybean production in Brazil’s Mato Grosso state is set to expand drastically having already grown 40 per cent in the past five years to take advantage of improved port facilities providing better access to export markets. Photo by Alf Ribeiro/Shutterstock南京夜网.As if being the world’s fifth largest country, blessed with vast areas of rising farmland productivityand a third of earth’s fresh water, isn’t enough.
Nanjing Night Net

Now Brazil’s enviable agricultural export capacity is enjoyinga port construction boom, too.

In fact, the long 8500-kilometre stretch of coastline capable of servicing farm exports and fertiliser imports could even see an oversupply of port infrastructure within a decade.

Soybeanproducers and exporters are the initial big winners, particularly as new port developments in northern Brazil will cut growers inland freight distances to the seaboard by 40 per cent and shave five days off shipping travel time to Europe.

The main grain production and export state, Mato Grosso in central/northern Brazil has already increased its cropping area40pc to more than 9 million hectares in the past five years.

Two developing inland river ports capable of handling modern shipping in the northern export corridor state of Para (Barcarena and Santarem) handled more than 3m tonnes of soybeans last season.

Just a few years earlier they exported almost nothing.

Nationally, soybean exports have already grown by 120pc in a decade to more than 55m tonnes, but inadequate port capacity and poor inland roads had been major hindrances to further expansion, saysan agribusiness report examining the implications of Brazil’s transport infrastructure drive.

Now major port developments are being mostly funded by private investment, including international agri-food commodity giants such as Cargill, Archer Daniels Midland and Bunge, which are among those paying for the Barcarena and Santarem upgrades.

Brazil already has more than 50 seaboard and inland river ports, but until 2013 they were mostly government managed, under funded and too shallow for grain shipping.

Private sector port investments, particularly in the so-called “Northern Arc”, have since motivated more grain production which is likely to see soybean exports alone rise by 16m tonnes by 2025, according to research by Rabobank grains analyst in Brazil, Renato Rasmussen.

He said Brazil’s soy area was therefore expected to “increase drastically” in the coming years.

Its current 75m hectares of arable land area couldspread into 10m hectares of underutilised pasture country in the next decade.

Longer-term cropping expansion could take Brazil’s arable area to more than 130m hectares as port efficiencies and competition slashed farm freightcosts and fertiliser prices.

Other crops, particularly corn, were likely to benefit, too, and so would Brazil’s massive export beef capacity, said Australian-based analyst with Rabobank, Ben Larkin.

Agribusinesses investing in port infrastructure would want to make the most of any commodity export or import opportunity through their upgraded facilities.

Mr Larkin said Brazil’s port efficiency push highlighted the importance of discussions about lifting the capacity of Australia’s own ag supply chain network.

“What’s happening in South America is a good reminder to us that other countries are forging ahead,” he said.

While in the past Australian exporters had not been so threatened by Brazil as a global competitor because of its sub-standard port and transport infrastructure, political and economic instability and biosecurity issues like foot and mouth disease, now its growing influence on protein and stockfeed markets could not be ignored.

“Although Australia is not a direct competitor in soybean or corn markets, Brazil’s indirect impact on oilseed and feed grain demand will impact global buyer and pricing trends,” Mr Larkin said.

In the meat trade, China and Europe were already big and increasing consumers of Brazilian beef and Brazil was pushing hard for access to Australia’s much-valued US market.

“Brazil is an agricultural powerhouse with some of the world’s lowest production costs, and a very competitive currency, of late,” hesaid.

Brazilian farm inputs analyst, Victor Ikeda, noted thatwith the country favoured by a tropical climate,good rainfall and abundant freshwater reserves the likely conversion of 9m-plus hectares to productive cropland by 2025 would be a boon for the nation’s economy.

“This expansion represents outstanding opportunities not only for farm inputs companies but to the entire Brazilian agribusiness,” he said.

This story Administrator ready to work first appeared on Nanjing Night Net.

This entry was posted in 南京夜网. Bookmark the permalink.

Comments are closed.