April 2, 2012

Brazil's corn export corridors may challenge US corn exports

US Grains Council country representative Alfredo Navarro said that changes in Brazil's main corn exporting corridors could have implications for the nation's ability to compete with the US.

Navarro, who tracks Brazil's export logistics and port use, already sees an evolving pattern in the 2001-11 period.

"In 2001, no corn was exported through the North corridor ports of Manaus, Santarem and Sao Luiz," Navarro said. "By 2007, 1.1% of Brazil's corn was shipped through Manaus, and last year 8.4% of the corn shipped from northern ports.

In the first part of 2012, shipments from the northern ports were 31.7% of total volume, a sharp increase from the same period in 2011.

"That is small compared to the potential in the region and the number of hectares planted," Navarro continued, attributing the disparity to inadequate infrastructure for port access. "The government has not realised how much Brazil's poor transportation network affects competitiveness."

The data also shows a startling export shift to Brazil's south eastern ports of Espirito Santo and Sao Paulo, which shot from a 4.8% share of corn exports to 59% by 2011. Brazil's southern ports (Parana, Santa Catarina, and Rio Grande do Sul) dropped from a near monopoly (95.1% in 2001) to a 32.5% share of corn exports in 2011.

Navarro's tracking also looks at inland supply routes that access Brazil's ports, where he noted that funds allocated for improvements have not been spent as intended, and corruption has delayed key construction projects.

At the same time however, Brazil is seeing more private investments to improve infrastructure and export reliability.