Rail/water ways mean better competitiveness

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Rail/water ways mean better competitiveness

Knight, P.

New soy farming areas in Brazil, along with an improved transport system through the development of inland waterways, the building or upgrading of railways and the privatization of port facilities will increase the country's competitiveness. The devaluation of the Brazilian Real in mid-January came at a good time for soy farmers, just as they were preparing to harvest and ship out their 1998/99 crop. However, this came at the end of some four years of a high Real against the US. One result of the low prices over the past few years has been to encourage efforts to reduce high transport costs in Brazil, which made growing soy less profitable compared to Argentina and the USA. As well as the extension of Brazil's waterways, its railways are also being developed and upgraded. Leading soy producer came up with the idea of extending the railway which runs from Santos to the border of Sao Paulo state, on into Mato Grosso do Sul. This line will eventually run north into the Amazon basin as well. 200 km of this line have now been consolidated into one unit with the tracks in Sao Paulo and will take soy to Santos for the first time this harvest. Up to four million tons will use this new route within four years. If the demand were there, Brazil's center-west region - where the rains never fail and where productivity averages close to three tons a hectare - has the potential to add an extra 30 million tons to Brazil's output, equal to the present amount.