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Panama Canal signs MoU to promote grain shipments from Brazil

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The Panama Canal has signed a Memorandum of Understanding (MoU) in Cuiaba, Brazil, to promote the east-west-route through the Panama Canal for grain shipments traveling from northern Brazil to the ports on the Pacific coast.

The agreement, signed with the Association of Soybean and Corn Producers of Mato Grosso (Aprosoja), will allow the two groups to conduct joint marketing activities and exchange market studies and information on trade flows to support modernisation and improvement programmes.

“The increased capacity afforded to us by the expanded Canal has had far-reaching positive impact across segments, and allows us to access new markets, which could include freight from ports such as those in northern Brazil,” said Panama Canal Authority (ACP) Administrator Jorge Quijano in Brazil. “The Panama Canal is proud to partner with this organisation and unleash an exciting opportunity for Brazilian exporters.”

Soy and corn grain transits originating in northern Brazil and traveling to markets in Asia, typically transit on panamax vessels given the similarity between the draughts in the Amazon River ports and the Panama Canal panamax-locks. The association (Aprosoja), created in February 2005, is a non-profit organisation comprised of producers linked to the soybean and corn crops in Mato Grosso, Brazil, who work to create initiatives to drive sustainable growth in the sector. The agreement was signed by the president of Aprosoja, Antônio Galvan, and ACP Administrator Quijano.

The MoU’s signing comes at a time when exporters of grains from Brazil are enjoying considerable increases in shipment volumes from the year before. Dry bulk, including grains, accounted for roughly 24% of the waterway’s total transits during its 2017 fiscal year. Since beginning its 2018 fiscal year on 1 October 2017, 21.6% of panamax and 7.9% of post-panamax transits were of dry bulk.

“This agreement with the Mato Grosso Association of Soybean and Corn Producers further strengthens the common goal of promoting regional trade growth,” added Quijano. “It will allow us to maintain our commitment to serving our dedicated customers in an informed, strategic and practiced way, and better position the Canal in its role as the logistics hub of the Americas.”

The Panama Canal has signed MoUs with 36 commercial associations, ports and maritime organisations, the majority of which are in the United States. This agreement with a Brazilian organisation is the first MoU between the Panama Canal and a Latin American country.