Drought brings shipping of soy products on Paraná River in Argentina to a halt

RIO DE JANEIRO, BRAZIL – With the lack of rainfall, the water level in the Paraná River in the region of Gran Rosario, Argentina, fell to its lowest level since the end of 1970. This has considerably affected the volume of shipments of corn and soybean derivatives in the Up-River ports, says the Rosario Stock Exchange in a report.

Although soybean crushing this year is so far at a much higher pace than in the first months of 2020 (from January to May, processing was 18 million tons, up from 15.5 million tons in the same period last year), in June, soybean meal shipments at Gran Rosario ports totaled 2.49 million tons, a volume 2% lower than in May and 12% lower than in June 2020. This is the lowest volume for the month since 2017/18.

Soybean oil shipments reached 553,000 tons last month, which represented drops of 10% and 11% compared to the previous month and June 2020, respectively. The volume for the derivative is also the lowest in four years.

The text makes the caveat that in the 2017/18 cycle, the severe drought that affected soybean production considerably reduced local grain availability. This slowed the pace of industrialization and, therefore, the volume of derived products.

As the vast majority of Argentina’s soybean mills are concentrated in Rosario and its surroundings, the Paraná river strongly influences the shipments of these derivatives abroad since it is not possible to complete the shipment in other ports.

The picture is different from what happens with corn. In the flow of the cereal, when ships must leave Gran Rosario with cargo in the hold lower than the total available, they can complete the load in the southern ports of the Province of Buenos Aires.

During June, the volume shipped of corn from all Argentine port terminals totaled 4 million tons, 20% more than in May, although there was an 11% drop compared to June 2020. Also, the volume shipped of corn at Gran Rosario ports was the lowest in four years.