Without Ports, Brazil’s Exports Are Going Nowhere Fast

In less than two decades, Brazilian agricultural production has grown an incredible 111%, reaching the figure of 123 million tons last year. Lack of transport infrastructure, especially the port system, however, may hinder, and even halt Brazil’s effort to become a global exporter.

It is not enough that the country has technological knowledge and physical space for one of the largest productions in the world. Many analysts’ forecast that even the country global export target can be compromised.

To specialists the lack of an adequate logistics system may stop producers from planting.

“Brazilian ports do not have the capacity to move the harvest efficiently,” stated Paulo Rossetti, agribusiness analyst for consultancy company Global Invest.

“This does not stimulate producers as they lose money due to this inefficiency. The current infrastructure bars the Brazilian potential of becoming a large grain producer.”

A recent example is the case of maize. World stocks have dropped to one of the lowest levels in history.

In the meantime, Brazil had a record harvest in 2003, and figures for this year are also above expectations. Producers, however, run the risk of not managing to ship the entire harvest due to lack of port space.

This chaos is not exclusively in agribusiness. At the end of March, carmakers were complaining about the lack of structure for car export in Santos port, the largest in Brazil.

The port can ship 120,000 cars per year, but in 2003 it received almost 245,000, and the forecast is for the figure to reach 280,000 this year.

For 2005, it is forecasted is for another 100,000 units. This is due to the fact that the Volkswagen factory in the city of São Bernardo do Campo (one of the cities in greater São Paulo) is going to start producing the Fox, which will be exported to the European market.

During a visit to Paranaguá port (in the southern state of Paraná), Development Minister Luiz Fernando Furlan admitted that the “Brazilian structure is not prepared for these harvest and export records the country is breaking.”

The Minister also stated that “emergency measures” are being taken. To businessmen, port operators, and analysts, however, these measures tend to be below what is necessary.

“Third category”

One of the reasons for the decadence in the system is lack of investment. Reports published by Global Invest show that, according to world estimates, “for a country to reach adequate infrastructure, it is necessary to invest at least 2% of the Gross Domestic Product (GDP) per year in the sector.”

“But in the case of Brazil, it is necessary to invest at least 4% of the GDP, due to precarious conditions of the transport system,” stated Rossetti, who wrote the report. However, Brazil only invests 0.2% of the GDP in the area, according to him.

Apart from being low, a large part of these funds goes to the highway system. Little is left for other areas.

“In Brazil, special attention is always paid to the highway transport system. Ports are seen as third class transport,” stated professor Hildebrando de Araújo Goes Filho, coordinator of the port planning discipline and head of the Water and Environment Department at the Federal University of Rio de Janeiro (UFRJ).

Investment, state specialists, is necessary to modernize ports, to make them match international standards, to increase the speed and to bring greater safety to cargo transport.


Steps in this direction were taken around seven years ago, in 1997, when the government started opening port operation to the private investors  – administration is still in the hands of state port authorities, as occurs in most countries.

From then on, there have been great advances. “Port fees have dropped between 50% and 70% in dollars,” informs a 2002 study by the World Bank.

According to the Brazilian Association of Port Terminals (ABPT), which brings together businessmen in the sector, before privatization, container movement cost up to US$ 500.

“Today the value varies from around US$ 100 to US$ 170,” declared organization president Wilen Manteli.

Manteli also points out the reduction in operating time. “Container movement, at an average speed of 10 to 11 containers per hour before 1997, is currently at around 30 per hour. In some cases as high as 40,” he stated.

“Apart from that, the time it took to unload ships, which used to be days, has now dropped to hours,” he explained.

Without Direction

That there has been improvement is almost unanimous. But it is also certain that there is still “much space for improvement.”

“Our ports lack everything: from training to technology,” stated the UFRJ professor.

Apart from greater investment, specialists and port operators are asking for the creation of an organized policy for the sector.

“A clear port policy is still lacking,” stated Goes Filho. The government itself agrees.

“There was really no planning,” informed the director of the Port Department at the Transportation Ministry Waterway Transport Secretariat, Paulo de Tarso.

“There was an operation method, but no planning,” he added.

Tarso pointed out, however, “we are now working to create a policy for the sector.” “We are bringing together businessmen, workers, and representatives from the government to discuss problems.”

But the volume of funds invested in the sector is not even close to that desired.

The Ministry budget forecasts investment of around US$ 850 million this year- 0.17% of the domestic GDP.

Apart from that, ports and waterways have the lowest share: around US$ 80 million and US$ 45 million respectively, which, added, represents little over 14% of the entire budget.

International Partnerships

It would be impossible to bring the investment up to the necessary levels, stated Goes Filho. To him, neither the government nor domestic companies can cover the costs necessary for modernization of Brazilian ports and bring them to par with the main international ports.

In the professor’s calculations, just in new port equipment, necessary investment would be around US$ 1 billion.

“Apart from that, it is also necessary to invest in training, as there is new technology. Port workers are no longer simply carriers of material. It is necessary to eliminate this point of view. There are engineers operating containers,” he stated.

According to him, Singapore, which has one of the largest ports in the world, has a school for employee training. “There is nothing like that in Brazil. Technology here is newly born.”

So as to cover the necessary expenses, the professor states that the government should establish partnerships with international companies specialized in port operation, like Hamburg Sud.

“These companies did not enter Brazil at the time of privatization as rules were not clear, and neither was the government investment policy transparent.”

In the evaluation of Goes Filho, only with partnerships will the country manage to increase port capacity – more and more in demand as export rises.

He compares container movement. According to the professor, Brazil currently transports around 6 million containers per year. The largest ports in the world – Singapore and Hong Kong – operate 18 million containers.

“Port decisions are fundamental for the country. Efficiency and capacity are lacking. This limits and increases the cost of cargo movement. As a consequence, it increases export cost. A lot of money is lost due to archaic systems. The government needs a strategic vision that it has never had,” he concluded.

This report is part of a series of articles on transport in Brazil prepared earlier this year by ANBA ”“ Brazil-Arab News Agency – www.anba.com.br


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