World Grain - November 2021 - 60

FEATURE: DANGEROUSLY DRY
ginning in October 2021. La Niña
is a weather event that significantly
reduces tropical rains and thus
causes river levels to drop.
Gustavo Idígoras, president
of CIARA-CEC, a crop export
and processing group whose
members include Cargill,
Glencore PLC and Bunge,
among others, said: " The negative
impact of this drop in water
levels is huge. Not only does it
hamper ship traffic, but it also
doubles
shipping
costs
and
downsizes loadings by 30% to
40%. Ships that can carry up
to 50,000 tonnes are now leavRains
are scarce
upstream mainly
because of land
clearing, and so
the Paraná and the
Paraguay rivers are
drying up.
Guillermo Miguel,
president, ENAPRO
ing Rosario with just 35,000 to 30,000 tonnes. That
causes extra logistics costs. "
Regarding costs, Idígoras said losses are estimated at
more than $350 million from March 2021 to July 2021
and that the same might apply from July to November
2021 if things do not improve.
" Most costs are being paid by traders that did
not foresee these losses when signing forward contracts, "
he said. " Corn is now being paid $30 more
per tonne at the Port of Bahía Blanca because ships
from Rosario must sail there to top off their loads,
which means that nowadays companies are paying
more than FOB corn price, and that is 100% paid by
export companies. "
Sesé, on the contrary, said it's farmers who end up
paying transport extra costs. He explained that for some
farmers, like those in Chaco Province, for instance,
sending grains by land to the Port of Bahía Blanca is
almost impossible since land freight fees are more expensive
than grain prices themselves.
Miguel said both farmers and companies are paying
more.
" We are now loading at least 20% less merchandise
at Rosario, which results in less profits and less taxes
for the Greater Rosario Hub, " he said.
Dried-up rivers also are jeopardizing the arrival of
soybean barges from Paraguay. A study by the Rosario
Grain Exchange found that the price of grains coming
from Asuncion has increased by $7.2 per tonne, which
means transporting exactly the same merchandise now
costs 36% more.
The situation is so critical that Argentina declared a
water emergency in seven riverside provinces on July
24, and the Buenos Aires province declared another
one in late September. Under this emergency, the government
approved infrastructure works by 1 billion
Argentine pesos.
60
Dredging and opening dams
Opening dams and dredging
have prevented the Paraná from
dropping to even lower levels,
but that is not enough.
" We are working together with
Paraguay and Brazil, " Miguel
said. " In May, Brazil opened
Itaipu Dam to let more water go
downstream and until mid-September
they were producing energy
every other week so as not
to worsen the waterway flow. We
are also dredging the river at its
30 critical points, but anyway we
desperately need rains. "
Upriver, the situation has been
worse. In August, 13 private terminals had to hire extra
dredgers at Loro Cuarto to enable shipments to go
downstream after being aground for days.
" It is clear that this drought will last at least until the
end of this year, and it is likely to continue in 2022, "
Idígoras said. " That's why deepening the shipping
channel, guaranteeing proper beaconing and implementing
an electronic signaling system to track ships
online is urgent. "
Miguel agreed, saying that if water levels continue
to subside next year and there is another La Niña phenomenon,
there must be better long-term logistics planning.
Installing structural dolphins to move ships away
from the original dock and solve the sailing draft issue
can be one possible solution for the Port of Rosario.
The Paraná River will only go back to its normal waterflow
if it rains in Brazil, where the basin begins. If
not, the river's volume will grow in summer but then it
will drop again. No one can predict what will happen,
but prospects are not encouraging.
" We are about to see in Argentina what was seen at
the Suez Canal last March, " Idígoras said. " And if that
happens, not only will grain exports come to a halt, but
the country will not be able to import anything. If this
gets worse, Argentina will be forced to close its foreign
trade operations. "
If that happens, Argentina will suffer, but so will the
rest of the world since the South American country is
the world's top supplier of soybean meal, used to fatten
hogs and cattle from Europe to Asia, and the third largest
exporter of corn.
Pamela Aguirre Leonetti is a freelance writer based in Argentina. She
may be reached at paiguirreleonetti@gmail.com
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World Grain - November 2021

Table of Contents for the Digital Edition of World Grain - November 2021

World Grain - November 2021 - Intro
World Grain - November 2021 - 1
World Grain - November 2021 - 2
World Grain - November 2021 - 3
World Grain - November 2021 - 4
World Grain - November 2021 - 5
World Grain - November 2021 - 6
World Grain - November 2021 - 7
World Grain - November 2021 - 8
World Grain - November 2021 - 9
World Grain - November 2021 - 10
World Grain - November 2021 - 11
World Grain - November 2021 - 12
World Grain - November 2021 - 13
World Grain - November 2021 - 14
World Grain - November 2021 - 15
World Grain - November 2021 - 16
World Grain - November 2021 - 17
World Grain - November 2021 - 18
World Grain - November 2021 - 19
World Grain - November 2021 - 20
World Grain - November 2021 - 21
World Grain - November 2021 - 22
World Grain - November 2021 - 23
World Grain - November 2021 - 24
World Grain - November 2021 - 25
World Grain - November 2021 - 26
World Grain - November 2021 - 27
World Grain - November 2021 - 28
World Grain - November 2021 - 29
World Grain - November 2021 - 30
World Grain - November 2021 - 31
World Grain - November 2021 - 32
World Grain - November 2021 - 33
World Grain - November 2021 - 34
World Grain - November 2021 - 35
World Grain - November 2021 - 36
World Grain - November 2021 - 37
World Grain - November 2021 - 38
World Grain - November 2021 - 39
World Grain - November 2021 - 40
World Grain - November 2021 - 41
World Grain - November 2021 - 42
World Grain - November 2021 - 43
World Grain - November 2021 - 44
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World Grain - November 2021 - 84
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