Aug 16, 2018
Low Water Levels on Parana River Impacting Argentine Ports
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Low water levels in the Parana River is causing exporters in Argentina to dispatch vessels without a complete load of grain or other products. The summer-long drought in Argentina and a lack of rainfall in southern Brazil is resulting in the lowest water level on the Parana River since 2008.
On August 2nd, the river height at Rosario, Argentina was 1.9 meters compared to 2.37 meters on the same date in 2008. Last Friday, August 10th, the water height was 2.06 meters and it is expected to increase to 2.10 meters this week before declining again next week.
The greater Roasrio area contains the principal ports of Argentina. Approximately 78% of Argentina's soybean processing capacity is found in the greater Rosario area. In a 70 kilometer stretch along the Parana River, there are 29 port facilities with 19 ports that export grain, oils and sub-products, 12 of those facilities have their own processing capabilities. Additionally, there are another 8 processing facilities in the region bring the total to 20 facilities that utilize grain to produce oil, meal, and other products.
If ports in the greater Rosario area are having problems loading vessels, it can impact the soybean processing/exporting capacity of Argentina. The Vegetable Oil Industry Association of Argentina (Ciara) indicated that the low water levels are impacting the grain terminals and the processors because it reduces the potential tonnage of grain in the vessels resulting in higher costs. The vessels may need to top-off their loads at deep water ocean ports such as Bahia Blanca and Quequen, both of which are located in southern Buenos Aires province.
The Commercial Exchange of Rosario indicated that between August 1st and August 8th, 61 vessels left the greater Rosario area loaded with soybeans, soybean meal, and soybean oil. For the vessels loaded with grain, the tonnage was lowered 3,200 to 5,000 tons below the maximum allowed due to low water levels on the Parana River.
The shipping channel in the Parana River as well as the docking areas, are routinely dredged to maintain a draft of at least 34 feet. If the draft is less than that, the vessels cannot be fully loaded.
Specialists at the Rosario Exchange indicated that it takes approximately 30 days for rainfall in southern Brazil to make its way to the Roasrio area. Additionally, the water level in the lower Parana River is also partly determined by the dams and resvioures on the upper reaches Parana River located primarily in Brazil.