The key for more competitive exports from northern Brazil to the US and Europe is repaving federal highway BR-163 between Mato Grosso state capital Cuiabá and Santarém port in the northern state of Pará, according to a CPI (Climate Policy Initiative) study.
Currently, the main route to move commodities from the mid-western agricultural state of Mato Grosso is from Cuiabá to São Paulo state's Santos port in the southeast via a 1,600km highway.
Despite having the most expensive berthing rates in the country (18 times those of Santarém), Santos remains the principal port for Brazil's grain exports, the study shows.
Getting to Santarém port, however, is a challenge as the 1,700km route along highway BR-163 to the area is in terrible shape.
Repaving the highway would give local producers a competitive advantage as it would reduce transport cost by approximately 54%, the report says.
In Brazil, the commodity most handled at public ports in 1H14 (in CPI's latest study) was soybean, which represents 19.4% of the total. This was followed by iron ore with 17.3% and fuels/mineral oils with 11.8%.
For private use terminals, the top three were iron ore, fuels/mineral oils and bauxite, representing 45.6%, 27.4% and 5.2%, respectively.
The most expensive berthing rates in the country are in the south and southeast, led by Santos and followed by Rio de Janeiro which is 6.5 times more expensive than Santarém and Itajaí port in the southern state of Santa Catarina which charges 6.13 times more, according to the study.
The Salvador/Aratú port complex in the northeastern state of Bahia charges 3.75 times more than Santarém, shows the report, which uses figures from waterways regulator Antaq.
Berthing rates at Brazilian ports relative to Santarém (CREDIT: CPI using Antaq data).