EXCLUSIVE Historic low river levels are forcing Argentinian grain ships to cut cargoes by 25%, ports chamber says
BUENOS AIRES, July 23 (Reuters) – Ships leaving Argentina’s Rosario grain center on the Parana River must reduce their cargoes by 25% due to extremely low water levels, the local port chamber chief said on Friday , with no relief in sight and the area should stay dry for months.
The Parana, which transports around 80% of Argentina’s agricultural exports, is at its lowest level in 77 years amid prolonged drought upstream from Brazil, which has impacted shipments of the country’s main exports. , especially soybeans, wheat and corn.
Drought in neighboring Brazil, where the river originates from, has reduced the amount of cargo that can be transported by ships during the height of the Argentine corn and soybean export season, with growing questions about the Parana’s capacity. to manage the wheat export traffic at the end of this year. Read more
“Today, ships charge around 25% less than when the river is at normal levels,” Guillermo Wade, director of the Argentine Chamber of Ports and Maritime Activities (CAPyM), told Reuters.
“If the situation does not reverse, and there is no suggestion that it will happen, we will lose 40% of what ships usually carry when water levels are normal,” he added, a forecast no published highlighting the potential seriousness of the problem.
Argentina is a major exporter of corn and wheat, as well as the world’s largest supplier of soy-based livestock feed. Uncertainty over Parana strikes at a time when international food prices are rising, with U.S. corn and soybean prices being boosted by drought in parts of the country’s agricultural belt.
The Argentine government asks the population to limit the use of water in order to alleviate the pressure on the Parana. Grain exports are the country’s main source of foreign exchange needed to refresh central bank reserves marred by a weak currency and a long recession.
“We expect drier than normal conditions to persist for another three months in southern Brazil. This would suggest that river levels will remain low or even decline in the coming months,” said Isaac Hankes, analyst. meteorological at Refinitiv, responsible for financial and risk management. Thomson Reuters business.
The Buenos Aires Grain Exchange has a 2021/22 Argentine wheat crop of 19 million tonnes and exports of 12 million tonnes. The harvest is done in December and January. It is an open question whether the river will be ready to handle the traffic.
A statement from Argentina’s national meteorological service called the impact of the crisis “multiple, widespread and costly.” He said the shallow depth was caused by a prolonged drought in the upper Parana Basin in southern Brazil.
“We are feeling the effects of a drought that began in June 2019. It is a cycle that is not over, and it is not known when it will be,” the service said in the statement.
Reporting by Hugh Bronstein and Maximilian Heath; Editing by Adam Jourdan and Marguerita Choy
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