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March 14, 2019

Conab to Sell Many of its Grain Storage Facilities in Brazil

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The Brazilian Minister of Agriculture, Tereza Cristina, and the new director of Conab, Newton Araujo Silva Junior, recently announced a preliminary study to determine the feasibility of selling Conab's numerous grain storage facilities located throughout Brazil. Currently, Conab has 178 grain storage facilities that they utilize to purchase grain from farmers and then to resell in an effort to help stabilize grain prices.

The Minister indicated that many of Conab's storage facilities are old and inefficient. Maintenance has been lax and many facilities have fallen into a state of disrepair. In fact, many of the facilities can only be partially utilized or not utilized at all. The Minister said that the cost of operating these facilities is more than what they are worth and that auctioning off of some of the facilities will start in the coming months.

She indicated that Conab needed to "trim the fat" and concentrate more on its core mission including: crop forecasting, production statistics, and generating official information concerning the agricultural sector which is essential for public policy decisions.

This is all part of a program to overhaul Conab's mission from top to bottom and bring it more closely in line with the Ministry of Agriculture. According to reports from So Noticias, her recent comments to a gathering of Conab's employees were well received.