Brazil Eyes Rail Link To Pacific

Brazil's Commodities & Futures Exchange (BM&F) has proposed an ambitious plan to help newly-elected President Luis Inacio Lula da Silva in his fight for "zero hunger" in South America's largest economy, OsterDowJones News reported.

The project, which involves building a rail link to the Pacific coast, would give Brazil's land-locked center-west cheaper access to a growing Asian market.

"The idea is to invert the strong west to east flow. Access to new markets and competitive gains would allow the country's grain production to increase to around 160 million tons by 2010," says Noenio Spinola, communications director at the BM&F.

Brazil's grains, cereals and oilseeds crop totaled 97.16 million metric tons in 2001-02, according to figures from the Brazilian Census Bureau, or IBGE.

Analysts, however, are taking the project with a grain of salt, says OsterDowJones. Most agree it sounds good on paper, but it's anyone's guess when it will be carried out.

"The idea has been around along time, since the ‘60s, and some day it will probably happen, but it could be in my grandchildren's time," says Anderson Galvao Gomes, an analyst with Minas Gerais-based consultants MPrado.

Financing the project is the main obstacle. The BM&F estimates the project will cost a whopping $9 billion, most of which will be spent in Brazil.

According to Spinola, 80% of the money will come from private investment funds, with the remainder coming from state coffers.

Editors note: Richard Brock, Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

To see more market perspectives, visit Brock's Web site at

www.brockreport.com.