Brazil Soybean Transportation Cost Indicators

Overview

Brazil is one of the most important U.S. competitors in the global oilseed market. Brazil’s competitiveness in the global market depends largely on reducing its transportation costs through improvement of its transportation infrastructure. The country also benefits from low production costs, increased planted area, high productivity, and a weak national currency. Because Brazilian and U.S. producers use the same advanced production methods and technologies, their soybeans are mostly interchangeable for buyers. Facing challenges similar to those of Brazil, the United States' global competitiveness also rests on transportation costs and infrastructure improvements. Although Brazil has been gaining a cost advantage, the United States retains a significant share of global soybean exports. The analysis behind this page comes from the quarterly report Brazil Soybean Transportation. For the latest report, click here.
Since 2013, Brazil has surpassed U.S. soybean exports, becoming the world's top soybean exporter. Furthermore, USDA forecasts Brazil to be the world’s largest soybean exporter through 2030. The United States remains the second-largest exporter, followed by Argentina, Paraguay, and Canada. China is the driver of global soybean trade, accounting for more than half of worldwide soybean imports.

Routes and Regions in the Brazilian Soybean Export Transportation Indicators

Export Costs to China via the Southern Ports

Asian, especially China, has been the predominate Brazil soybean export destination in recent years, followed by shipments to Europe, Middle East, and Africa. Soybean trade to China is dominated by the southern ports of Santos, Rio Grande, Paranaguá, and São Francisco do Sul, which account for over two thirds of Brazil’s soybean exports to China. Meanwhile, the northeastern ports of São Luís, Vitória, Salvador, and Barcarena account around a quarter of exports to China. The Amazon River ports of Manaus and Santarém account for only a small share of exports to China.
The two charts below show the changes in transportation and landed costs for exports to China and Germany. By default, the first chart shows transportation costs of shipping soybeans from North MT by truck to Santos and ultimately to China. The second chart, by default, shows transportation costs relative to farm gates prices and landed costs for the route from Northwest RS to Rio Grande ultimately to China. With both charts, filters can be used to select different Brazil routes or to choose a specific destination.

Transportation Costs

Transportation's Share of Landed Costs

Transportation Costs by Route

Brazil Truck Transportation Costs

Brazil depends heavily on trucks to transport grain to major export destinations. This dependence is ensured for some time, because of the long distances between major production regions and terminals for barge and rail, as well as limited rail and inland waterways infrastructure capacity.
Several factors influence the cost of shipping soybeans by truck. Truck costs can increase or decrease depending on the relative strength of the Brazilian real (R$) against the U.S. dollar. In addition, truck costs change in relation to the availability of alternative highways. For example, truck rates decreased with the completion of the BR 163 road paving project, connecting Sorriso, North Mato Grosso, to Itaituba, Pará. Industry analysts expect transportation costs to reduce further, up to U.S. $7/metric ton (mt) (or R$30/mt) for the route from Sorriso to Itaituba. With improved routes, time to complete trips shrink, along with the costs of fuel and truck maintenance.

Weighted Average Truck Rates

The chart below shows a weighted average truck rate to account for the varying grain volumes as a share of total production moved across the different routes, i.e. to more heavily weight rates on large-volume routes.

Truck Rates by Southern Export Route

Ocean Transportation Costs from Brazil

Ocean rates from Brazilian ports to Shanghai, China, and Hamburg, Germany, have fluctuated throughout the years. Ocean rates are partially influenced by bunker fuel prices, Brazilian grain exports, and the global iron ore trade that can impact the availability of Panamax vessels for grain exports at Brazilian ports.