Aug 30, 2021

Low Water Level Impacting Paraguay River in Paraguay

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

There has been a lot of news coverage about the low water levels of the rivers in Argentina and Brazil, but the dry weather has also significantly impacted the water level of the Paraguay River in Paraguay. The Paraguay River starts in Mato Grosso, Brazil, it then travels south through Paraguay before joining the Parana River in northern Argentina.

It has been dryer-than-normal in the headwaters of the Paraguay river for about three years, and it won't improve until early 2022, it then. As a result, barges carrying grain out of Paraguay are only half full due to the historic low water levels.

Approximately 96% of Paraguay's grain exports utilize the Paraguay and Parana Rivers and the movement of grain has been slowed significantly, and for barges that do make the trip to Argentina, it is taking three times longer than normal. There are silos in Paraguay still full of last year's production, and if the situation does not improve by the end of 2021, there may still be gain in Paraguay that has not been exported. The old crop will have to be moved out to make way for the new crop which will start to be harvested in January.

All the shipments on the river are being delayed by the low water level, not just grain. These delays include fertilizers that generally move up the Parana River from ports in Argentina and Uruguay. Industry sources have indicated that fertilizer importers have diverted some of their imports to Brazilian ports and they are utilizing trucks and containers to move the product overland to Paraguay. This is more expensive and slower than utilizing barges out of Argentina.

Soybean planting in Paraguay will start in September and there are concerns if there will adequate supplies of fertilizers for farmers in Paraguay.