6 Discussion of results
For being a high volume and low value-added product, high transportation costs might impact
decisively on total costs of soybean exportation. The seasonality of soybean production and the
corresponding seasonal demand for transport services is reflected in the freight price development.
Given these peculiarities of the crop and considering the tight correlation to the world
market prices, it can be concluded that a principal measure to increase competitiveness of the
Brazilian soybeans should be the implementation of infrastructural programs in order to decrease
transportation costs. Brazil's challenge is the improvement of the infrastructure in the medium
term and investments to expand the network in the long term to diminish logistics and transportation
costs and increase competitiveness of soybean exports from distant production areas.
Freight rates in the competitive road transportation sector are composed by the company's marginal
costs plus a profit margin and are influenced by the market behavior. The price formation of
rail freight, however, is rather intransparent. The market analysis revealed that soybean shipping
via railroad from Mato Grosso, Goiás and São Paulo to Santos port is at harvest peak times more
expensive than trucking. This might be an indication that ALL, which is the only railway service
provider on this railroad, indeed exploits its customers based on a monopolistic market position.
Higher competition in the rail transport sector and the improvement of the rail infrastructure
might be an important factor to affect freight prices positively. Reforms are necessary to relocate
the transportation matrix to the high volume and low cost transport modalities of railroad and
waterway and to create more competition amongst operators.
Transport costs affect the competitiveness of soybeans produced in the inland of Brazil. The sensitivity
analysis revealed that the longer the distance from production region to seaport, the larger
are the effects of increased input prices. Supportive measures, such as the currently low interest
rate on capital for truck financing (2.5 %, see chapter 4.2.2.2), may help keeping transport
costs at a low level and indirectly support producer prices in remote regions. Any cost increase of
input factors would result in higher transport costs and might result in losses of competitiveness
if circumstances remain equal to the reference case. Any decrease, however, offers potential to
increase the competitiveness of the soybeans. Strategic infrastructural investments link the remote
agricultural areas to the infrastructure and open new export corridors to the north, like the
Sorriso-Santarém corridor (BR-163). That way, an integrative system of different modalities could
be realized. Logistics bottlenecks (see chapter 5) could be reduced. The access to more modalities
than road transportation would benefit more producers as competition could create more competitive
freight rates. Redirecting export volumes from the Sorriso-Santos corridor to the Sorriso-
Santarém corridor could diminish congestion on the export corridor to Santos.
With the doubling of the soybean volume exported via Santos (2001: 4.60 mmt; 2011: 9.23 mmt;
MDIC, 2012) it became apparent that access to the port is lacking and capacities are not sufficient
for efficiently turning over the high volumes at low costs and small operational time (see chapter
2.2.5). Any further increase in the export volume could adversely affect the competitiveness of