The rivers that flow through Brazil, Argentina and Paraguay are becoming shallower because of the recent drought, meaning that barges are having to carry less than their usual loads of staple exports. The drought has also impacted the production levels of those exports, such as wheat, corn and soybean.
Paraguay has asked Brazil to release water from the Itaipu hydroelectric dam after vessels ran aground and bottlenecks formed in river ports because barges were unable to move.
In one important Argentine leg of the 3,000-mile-long Parana River, uncertainty over dredging work was causing additional concerns. A government contract with a joint venture led by Jan De Nul NV, the Belgian company that does the excavation in the riverbed and had been working overtime during the dryness, expired late last month and there was no clear plan to extend or replace it.
Argentina, which is the world’s top exporter of soybean meal for livestock feed and soybean oil for cooking, exports about 80% of its crops via rivers. Paraguay, the region’s third-biggest soybean producer, moves some 80% of its trade through inland watercourses.
Esteban dos Santos, head of the Shipowners Association of Paraguay, which runs the world’s third-largest river-barge fleet (after the US and China) said that waters that were 3 metres lower than usual and were getting shallower every day.
The water depth of the Parana River there needs to reach at least 95 centimetres for barges loaded with soybeans for export to move. Dos Santos said that near the Yacyreta hydroelectric dam in Paraguay it was currently a third of that. Navigation had been halted since early April. Similar logjams were forming in other parts of the country.
Loads of corn, coffee and sugar from Brazil are being reduced so that the barges can negotiate the shallower rivers.
In Rosario, Argentina, where large ships load crop exports before heading to the Atlantic Ocean, water levels had dropped precipitously.
Guillermo Wade, manager of port group CAPyM in Rosario, said that a decrease of a 30cm in the maximum ship draft represented a loss of 1,800 to 2,200 metric tons of load capacity, depending on the ship.
The waters that feed the Paraguay and Parana rivers flow south from the Brazilian states of Mato Grosso, Mato Grosso do Sul, Minas Gerais and Sao Paulo. In Sao Paulo state, there had been a precipitation shortage every wet season for the past 13 years. This year rains in Q1 reached only half of the expected volumes.
Last year Argentina asked Brazil to release water from the Itaipu dam into the Parana River to increase water volumes, because levels were at their lowest since 1989.