An ANEC survey shows that Brazilian freight costs for exporting oilseeds to China exceed those of Argentina and the U.S.
11/14/2024
Brazil faces significantly higher costs to ship soybeans to China compared to competitors like the United States and Argentina. According to data from the National Association of Grain Exporters (ANEC) from March this year, the freight cost for soybeans from Sorriso (Mato Grosso) to China reaches $124 per tonne when using trucks over the 2,000-kilometer stretch from Mato Grosso to the Port of Santos.
The cost of mixed truck and rail transportation drops to $111 per tonne, while using a combination of barge and truck costs $103 per tonne. In contrast, the March cost for shipping soybeans from Illinois to China was $75.50 per tonne.
Argentine exporters moving soybeans from Córdoba to the port of Rosario pay around $94 per tonne by truck, with rail transport reducing the cost further to $79 per tonne.
“In the U.S., production travels half the distance to reach ports compared to Brazil, and better road maintenance reduces vehicle costs. A greater reliance on railroads and waterways also significantly lowers freight expenses,” said Sérgio Mendes, ANEC’s executive director.
Thiago Péra, coordinator at EsalqLog, notes that just 16% of U.S. agricultural transport relied on trucks last year, while waterways accounted for 53% and railways 31%. In Brazil, however, road transport dominates at 54%, while railways account for 33% and waterways just 12%.
Mr. Mendes also highlights that Argentina focuses on crushing soybeans before exporting, with processing facilities located within a 250-kilometer radius of the ports, further reducing logistics costs.
Seasonal demand also impacts Brazilian freight costs due to limited storage capacity, which “causes a spike in road freight prices during peak harvests of soybeans and corn,” says Mr. Mendes.
According to ANEC, the U.S. has a storage capacity equal to 131% of its grain production, whereas Brazil’s capacity is estimated at only 60% of annual harvests.
Executives and researchers agree that improving Brazil’s competitiveness hinges on establishing legal frameworks that attract private investment alongside state-driven infrastructure programs. Streamlining bureaucratic hurdles for licensing railways and other routes is another widely recognized need.
*By Fernanda Pressinott, Globo Rural — São Paulo
Source: Valor International