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March 8, 2019

Highway BR-163 in Northern Brazil Reopened to Truck Traffic

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

After nearly two weeks of blocked traffic on highway BR-163 in northern Brazil, authorities have reopened the highway and traffic started to move again on Thursday, March 7th. Heavy rains had made an unpaved section of the highway in a hilly area impassable for trucks loaded with grain heading north to ports on the Amazon River.

After spending a week of trying to assist trucks up the hills at the same time that they were trying to repair the roadbed, the National Department of Infrastructure and Transportation (DNIT) decided to close the road completely last weekend and concentrate on bringing in crushed rock to stabilize the roadbed. Repair work proceeded 24 hours per day as they brought in hundreds of cubic meters of crushed rock per day.

In the meantime, at least 2,500 trucks have been stopped for a week or more in a very sparsely populated area without basic necessities such as food, water, and other services. Local authorities and volunteer residents have tried to meet the needs of the stranded truck drivers, but it has been woefully inadequate. The losses for the truck drivers and their companies are going to be very high. The trucks are covered by tarpaulins and some truckers have even indicated that the wet weather has caused some of their soybeans to deteriorate.

There were actually more than 2,500 stranded trucks because authorities closed north bound traffic at the border between Mato Grosso and Para so that the traffic jam would get longer. So there are probably thousands of additional trucks waiting in Mato Grosso to head north. At this time of the year, there are approximately 1,000 grain trucks per day heading north on BR-163 to ports on the Amazon River.

When the highway was finally opened, the first trucks allowed through in single file were empty trucks heading south. After all the south-bound trucks are through, then the heavy north bound trucks will be allowed through, again single file. The authorities have also indicated that they will now liberate north-bound traffic to proceed north from Mato Grosso.

Highway BR-163 is the main connection between the grain belt of central Brazil and the Northern Arc of ports on the Amazon River. The Northern Arc of ports were responsible for 28% of Brazil's soybean and corn exports in 2018 according to the National Agency for Water Transport (Antaq). The northern ports exported 29.6 million tons of grain in 2018 compared to 6.1 million in 2010. Exporting grain north out of Brazil instead of the more traditional ports in southeastern Brazil saves time and money due to the closer proximity to the Panamal Canal and customers in Europe and North America.

Ports on the Amazon River indicated they would run out of soybeans by Friday, so the reopening came just in time. With these recurring problems in Brazil, producers and exporters are worried that it could erode confidence in Brazil as being a reliable exporter of grain. DNIT has indicated that the paving of BR-163 will finally be complete in 2019, but they said the same thing for 2018.