Low Water Levels Causing Shipping Problems in Northern Brazil

Low water levels on rivers in northern Brazil are forcing shippers to reduce tonnage on barges and reroute some grain shipments to ports in southeastern Brazil.

Grain shipments on the Madeira River, which transports grain from western Mato Grosso and Rondonia to the Amazon River, have been halted due to low water levels according to the Association of Port Terminals in the Amazon Basin (Amport). Barges on the Tapajos River, which transports grain from northern Mato Grosso to the Amazon River, have reduced their capacity by 40%.

These northern export corridors have become increasingly more important for Brazilian exports. The “Northern Arc” of ports in Brazil including Barcarena (PA), Itaqui (MA), Santarem (PA), and Itacoatiara (AM) were responsible for 33.8% of Brazil’s soybean exports in 2023 and 42.5% of Brazil’s corn exports according to Conab.

The reduced barge capacity is delaying shipments, increasing costs, and forcing some shipments to be redirected to ports in southeastern Brazil according to the National Association of Grain Exporters (Anec). If a grain shipment that was scheduled to go from the city of Sorriso in central Mato Grosso to the Port of Barcarena at the mouth of the Amazon River is redirected to the Port of Santos in southeastern Brazil, it would increase the cost by US$ 21 per ton.

Anec officials are confident that logistical problems in northern Brazil will not result in fewer overall grain exports, but they will delay the exports and increase the costs.

This is the second year in a row for logistical problems in northern Brazil. In 2023, most of the problems occurred in September and October. This year, the problems started earlier in August and September and it is unclear when the issues will be resolved.

There is very little rain in the near-term forecast for central and northern Brazil and most metrologists in Brazil are not forecasting a return of regular summer rains until late-October or November. Even then, they feel the rains will be lighter-than-normal and poorly distributed.

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Tags: exports, corn, grain, Brazil, soybeans, shipments, water levels, Amazon River, Madeira River, ports