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January 26, 2018

New Route to Import Corn from Paraguay into Southern Brazil

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

The state of Santa Catarina in southern Brazil is Brazil's largest hog producer and second largest poultry producer, but it has a chronic deficit of corn. The situation has gotten even worse in recent years as farmers in the state switch some of their full-season corn to soybean production instead. This will force the state to import more than 3.5 million tons of corn in 2018.

Traditionally, this corn comes from the center-west region of Brazil and particularly the state of Mato Grosso. There ae no railroads or waterways linking the two states, which means that all the corn must be brought in by truck at very high transportation cost.

The state does import some corn from Paraguay, but it must enter Brazil at the city of Foz do Iguacu in the state of Parana and then be trucked south to the livestock areas of Santa Catarina.

For the last four years, the state of Santa Catarina has been working with Paraguay and Argentina to develop a more direct route to ship the corn from southern Paraguay, across a small portion of Argentina and then directly to the state of Santa Catarina.

The corn will leave southern Paraguay and cross the Argentine province of Misiones in the direction of the city of Bernardo de Irigoyen. From there, it will enter Brazil at the city of Dionisio Cerqueira, Santa Catarina. Once in Brazil, it is only a short distance to the main hog and poultry producing regions of the state. The entire trip will take about 10 hours, which is a fraction of the time of the old routes. It is estimated that the new route will reduce transportation costs by approximately 70%.

It took several years to make the necessary arrangements between the three countries involving import/export issues, documentation, phytosanitary certificates, etc.