Cargill, LDC among winners of Brazil port auction

Cargill, BTG Pactual Commodities and a consortium formed by Louis Dreyfus and Brazilian grain trader Amaggi have won rights to operate three separate terminals at Paranagua port on Wednesday.

The competitive auction, which involved several bidders, highlights the importance of improving Brazilian logistics in the context of a global trader war.

At an auction at the Sao Paulo Stock Exchange, the companies offered a combined 855 million reais ($151 million) for the rights to operate three separate Paranagua areas for 35 years.

The interest comes as global grain traders brace to deal with more demand for Brazilian agricultural commodities from countries like China, which is engaged in a trade war with the United States.

After the auction, the company’s are expected to increase the volume of Paranagua’s vegetable bulk shipments by 4.8 million tons by year, representing a 47% gain, the Port’s press office said.

Cargill beat Arco Norte Infraestrutura e Logistica with a bid of 411 million reais for the PAR 15 terminal, the highest amount at the auction.

Paulo Sousa, president of Cargill in Brazil, said in a statement the company is pleased to have won rights to operate that terminal for another 35 years.

Paranagua is strategically located to receive products like soymeal from Cargill’s first soy processing unit opened in Brazil, which is based in Ponta Grossa and just 214 kilometers (133 miles) away from the port.

The ALDC consortium, comprised of Louis Dreyfus Company and Amaggi, won the PAR25 port area.

In a statement, Amaggi and Dreyfus said they are committed boosting shipments through Paranagua, one of Brazil’s key grain export hubs along with Santos port.

Total investments in the three port terminals are expected to reach 2.4 billion reais ($423 million), according to data from the Brazilian federal government.

Tags: terminals, Cargill, Amaggi, grain, BTG Pactual Commodities, Brazil, Paranagua port, investment, Santos port, logistics, soy, shipments, soymeal, Louis Dreyfus, demand