Brazil drought dries river and stops shipping on key grains corridor

By Roberto Samora

SAO PAULO (Reuters) - A widespread drought in Brazil has halted the transport of grains through the Madeira river, an important northern waterway linking key croplands with the country's ports, regional port terminals association Amport said on Wednesday.

The Madeira river is a key corridor for shipping products from Rondonia state and parts of Mato Grosso state, Brazil's top soy producer, to export terminals located in the country's northern states.

"Grain transportation in the Madeira is currently halted as river's depth in critical points is around two meters (6.6 ft), making navigation commercially unfeasible," Amport President Flavio Acatauassu told Reuters.

Some 34% of Brazilian soy exports in 2023, and almost 43% of corn exports were shipped through the so-called North Arc region, which includes ports located in northern Brazil, according to data from the national crop agency Conab.

Brazil is the world's largest exporter of soy, and one of the largest corn exporters.

However, the shipping halt may not affect Brazilian exports as local farmers have already shipped most of the grains expected for 2024.

Local grains traders lobby Anec said on Wednesday that the lower capacity for transporting grains through northern ports has raised costs for the exporters, but added the companies had been already prepared.

"There should be no reduction in grain exports due to the drought in the northern region, as traders work with a very high level of precaution," Anec's General Director Sergio Mendes said.

(Reporting by Roberto Samora in Sao Paulo; Writing by Andre Romani)