ADM-Glencore grain port venture to shuffle Brazil grain flows
By Karl Plume
CHICAGO Feb 3 (Reuters) - Plans by commodities trading rivals Archer Daniels Midland Co and Glencore PLC to jointly develop an export terminal in northern Brazil promise to shift grain flows both within South America's largest producer and to Asian importers.
ADM will give Glencore 50 percent in its Barcarena export terminal in Brazil's Para state, it said on Tuesday, the Swiss-based company's first foray into Brazilian grain ports.
The companies plan to quadruple the facility's annual capacity to 6 million tonnes, making it one of the country's largest grain export terminals.
Terms of the deal and the timeline for expansion were not disclosed.
The two grains heavyweights hope to tap rising crop production in northern Brazil, eyeing the upcoming expansion of the Panama Canal for a more direct route to Asia, industry analysts said. Northern ports are also easier and cheaper for exports from northern Mato Grosso, Brazil's top soybean state.
Brazil currently exports the majority of its crops through southern ports such as Santos and Paranagua, which have become congested as a result. Investments in better roads in recent years have opened a path to northern ports.
"The global players are all lining up to participate in what is expected to be a boom," said Pedro Dejneka, managing partner with AGR Brasil, a unit of consultancy AgResource Co.
"The pie is plenty large for everyone to participate but these northern ports need to exist if Brazil wants to expand production in the next decade" and be competitive globally, he added. Continuación...