THE SUPPLY CHAIN OF BRAZILIAN MAIZE: APPLICATION OF A PARTIAL EQUILIBRIUM MODEL

Bruna Fernanda Ribeiro Lopes, Andrea Leda Ramos De Oliveira

Abstract: The main consumers of Brazilian corn are in Asia and the main Brazilian production regions are far from ports, causing this product to travel long distances to arrive at its destination. This study begins with the hypothesis that reductions in transport costs can promote the competitiveness of corn on the international market, using intermodality. The methodology used is a partial equilibrium model based on quadratic programming to optimise the logistic flows of corn. Three scenarios are proposed. Scenario 1 depicts the reality currently practised in the sector and being the base scenario. Scenario 2 simulates a 15% reduction in costs in waterway and railway transportation to verify the potential of intermodal routes. Finally, Scenario 3 considers two new routes from new public infrastructure works. Results indicate that there were significant gains resulting from increased transportation options for corn,as well as the consequent revenue gains, especially in Scenario 2, in which 60% of the active routes were intermodal. Scenario 3 is also worth mentioning as it showed increased production in the region of Mato Grosso. This indicates that investments in logistics infrastructure will increase the competitiveness of Brazilian corn in the international market.

Keywords: Brazilian maize; equilibrium model; infrastructure; intermodality; logistics

Date published: 2017-11-29