Sector Overview

The four railroad concessions we operate cover approximately 12,000 kilometers of railroads located in the South, Southeast and Midwest regions of Brazil, where approximately 80% of the country's GDP is concentrated. Our railroads transport agricultural commodities and industrial products, and are connected to the country's four main ports (Santos - SP, Paranaguá - PR, São Francisco do Sul - SC and Rio Grande - RS). Those four ports concentrate most of the country's agricultural commodity exports. Exported agricultural commodities account for 70% to 80% of the volume transported in this segment. 

Calendar of Brazilian Crops

The following table highlights the calendar of the main agricultural commodities transported by Rumo.

 

Note: Exports*: 5-year average according to Brazilian Trade Balance
Source: SLC Agrícola,  Raízen, Sã Martinho, SECEX, Embrapa, BofA Merrill Lynch Global Research

Freight Dynamics in the Brazilian Market                                                                

Freight prices in Brazil are freely negotiated based on supply and demand. Freight prices, however, are influenced by variables such as distance traveled, operating costs, the possibility of back hauling, speed of loading and unloading, seasonality of demand for transportation, delivery time and some geographical aspects. Agricultural trading is particularly sensitive to changes in transportation costs since they account for a significant portion of the final price. 

Given the dynamics described above, there is no official benchmark price in the Brazilian market for road or railroad freights. The most important road routes are monitored by economic research institutes to check the behavior of market prices. The data collected can serve as the basis for negotiating the freights for specific products and their respective destinations. The table below shows historical freight prices between the Rondonópolis (Mato Grosso) and the Port of Santos (São Paulo). This route is responsible for a significant portion of the grains transported in Brazil according to the Instituto Mato-Grossense de Economia Agropecuária (IMEA; www.imea.com.br). 

road Freight Rondonópolis - Santos
 

Click to enlarge.

Source: IMEA
Note: monthly moving average freight released weekly by IMEA

Last updated on
Back