Brazil’S Infrastructure And Logistics: Struggling To Keep Up With Agricultural Growth

(MENAFN- The Rio Times) Brazil's inadequate logistics infrastructure incurs high costs for transporting crops, cutting into farmers' profits.

Two main issues are insufficient storage capacity and heavy reliance on road transport, which accounts for over 65% of Brazil's transport matrix.

Rail freight costs 20% less than road transport, and waterway transport can be 60% cheaper. However, Brazil lacks adequate railways and waterways to serve its agricultural centers.

The UN 's Food and Agriculture Organization (FAO) recommends storage for 120% of a country's harvest.

This allows farmers to wait for better prices and spread transport costs throughout the year.



In Brazil, storage capacity covers only 65% of the harvest, forcing immediate transport and driving up costs.

A March study by the National Association of Grain Exporters (Anec) highlighted these costs.

In Mato Grosso, the top agricultural state, farmers spent between $122 and $138 per ton to ship produce to Shanghai, China, compared to $75.50 per ton for Illinois, USA, farmers.

In Mato Grosso, trucking grains to Santos costs $103 per ton, while using a combined truck and rail route costs $92 per ton.

Sea freight from Santos to China adds $35 per ton. The northern route, trucking to Miritituba and then using barges to Barcarena, is cheaper at $122 per ton total.

From 2009 to 2023, Brazil's soy and corn production grew 7.2% annually, with exports rising 10.8% annually.
Brazil's Agro-Logistics Infrastructure
The North-South Railway (FNS), a key agro-logistics infrastructure, took 36 years to complete.

It extends 2,200 km from Açailândia to Estrela d'Oeste, connecting with the Paulista Network to Santos.

Many projects remain unrealized. The East-West Integration Railway (Fiol) and the West-Central Integration Railway (Fico) are partially completed.

In addition, these projects aim to enhance access from agricultural regions to key ports.

Rumo Logística, operating 14,000 km of railways, plans to increase the Paulista Network's capacity within three years, investing $2.5 billion.

Farmers advocate for Ferrogrão, a third railway in Mato Grosso. Despite environmental concerns, diversified rail infrastructure would lower costs through competition.

The Northern and Midwest rivers transported over 35 million tons of grains in 2023 but remain underutilized.

The federal government aims to address this through private concessions and plans to auction three waterways in 2025.

Brazil's logistical challenges underscore the need for strategic investments to support its booming agricultural sector and maintain global competitiveness.

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