by PressIn Argentina, low water levels in the river lead to a reduction in soybean exports
Low water levels in the Paraná River: implications for exporters
There may be problems with shipments of soybeans in Argentina. The reason is the low water level in the river through which ships with agricultural products pass.
Reduced water level in the Paraná River increases the risk that the transport will run aground. Therefore, traders are forced to load ships not at 100%, which results in disruption of the normal schedule of the ports, there is a disruption of shipments.
During the period of falling water levels in the river, soybean exports from the port of Rosario, which is the main logistics facility in the Argentine domestic market, have decreased. The drop in shipments is seen at 271,808 tons, which corresponds to a share of 60% of the total.
Through the port of Rosario, which is located on the Paraná River, more than 80% of shipments of agricultural products. The water level here has now dropped to a level of 40 cm above sea level, by comparison, the historical average is 3.5 meters. Experts say the situation may become critical as the water continues to decrease. The reason is the prolonged drought in the country, which is expected until December.
The water level in the river has dropped to a historic low for the last 80 years, which leads to less and less loading of ships. Traders fear that traffic could run aground, causing even more losses than they are currently suffering. Shipping operations are limited, shipping costs have also increased, and port operations are significantly disrupted.
It should be noted that the water level in Parana was also low in 2020. Then it dropped below the record low for 50 years. This led to losses for exporters, they lost 244 million dollars as a result of incomplete loading of the fleet.
Ships are forced to reduce the amount of transported products by 5-7 thousand tons, which entails accumulation of stocks at terminals.
Another issue that affects the full operation of ports on the river is the termination of the license of Jan De Nul NV from Belgium. The document authorizes the dredging activities, but due to the preparation of the tender by the Argentine government, the project implementation is delayed. This situation introduces even more uncertainty to the terminals’ operation, and in the meantime the water level keeps dropping. In this regard, domestic market prices are rising not only for soybeans, but also for grain. According to data from the relevant ministry of Argentina, soybean exports decreased by 57% compared to last year, amounting to 1.3 million tons.