SAO PAULO, Nov 3 (Reuters) - Brazil’s Itaqui port, the country’s closest deepwater gateway to the Panama Canal, has projected a rise in 2017 shipping volumes thanks to a record grain harvest and development of a new northern farming frontier.
Most of Itaqui’s export cargo arrives by train instead of roads. It is the deepest public port in Brazil, and its travel time to Europe and North America is seven days shorter than from rivals in the South.
Itaqui can handle minerals, grains, fertilizers, fuel and woodpulp consignments. Until recently, it was strategic to oil company Petroleo Brasileiro, which accessed its deepwater berth to import fuel in large vessels.
With a change in Petrobras’ strategy causing its fuel transshipment activity to fall to almost zero, grains became even more crucial to Itaqui operations, Ted Lago, head of the state-owned company that controls the port, said in a telephone interview.
After Petrobras’ move, overall 2016 cargo volumes dropped 23 percent as Itaqui’s new grain terminal was still ramping up operations. A fall in grain output from the Matopiba region, Brazil’s newest farming frontier in the north, also took its toll.
“This was a double blow for us,” Lago said.
Yet as Matopiba recovered and Brazil harvested a record grain crop this year, total Itaqui volumes should rise 12.5 percent to 19 million tonnes, with grains making up 8 million tonnes, Lago said.
Recent regulatory challenges threatened Itaqui’s ambition to become one of Brazil’s best-run state ports.
After global firms like Louis Dreyfus Corp and Glencore International spent about $184 million to build a new grain terminal as part of a wider consortium, a regulatory limit set by port watchdog Antaq was imposed on the amount of grains an established operator, VLI Operações Portuárias SA, could move at Itaqui.
The cap, set at 2.4 million tonnes of soybeans and 90,000 tonnes of soymeal, was supposed to lure new private investors to Itaqui’s new terminal at the expense of VLI, Lago said. Partly owned by miner Vale SA, VLI operates one of the two railroads serving Itaqui.
Until a consortium known as Tegram Operações Portuárias SA reaches full capacity by mid-2019, that limitation stands, Lago said. The cap was only loosened in September of 2016, after regulator Antaq defined that it excluded corn.
“The cap issue was like throwing gasoline on fire,” Lago said.
$1 = 3.2611 reais Reporting by Ana Mano; Editing by David Gregorio