Investment needed to ease Mideast port congestion: Cargill

Tue Feb 4, 2014 12:10pm EST
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By Maha El Dahan

ABU DHABI (Reuters) - U.S. agribusiness giant Cargill Inc.CARG.UL sees a pressing need for more investment to relieve port congestion in the Middle East and North Africa to ease delays that make governments pay more for imported food.

On the export side, Cargill is interested in new ideas for investment to get more Black Sea region grain exports to the world market while overcoming limitations of space for new facilities there.

A 20-30 day delay to discharge goods is now commonplace in Morocco's Casablanca while similar problems face Egypt's Dekheila port on the Mediterranean, the managing director of Cargill in the Middle East and Africa said on Tuesday.

"This is an interesting area that governments should look at, as many ports in the Middle East and North Africa today have very long line-ups of vessels as the port capacity to get the commodities into the supply chain is not sufficient," Johan Steyn told Reuters in an interview.

As well as holding up goods for longer at ports, the congestion ultimately pushes the price of imports higher because slow discharge rates are factored into freight calculations.

"It puts a time lag on the supply chain but it also raises the cost," said Steyn, who was in the United Arab Emirates capital Abu Dhabi for an agricultural innovation conference.

Egypt, the world's largest wheat importer, operates its ports at near full capacity, handling up to about 20 million metric tons of grain and oilseeds a year.

Port congestion has been particularly pronounced in Egypt since three years of political turmoil triggered a currency crisis that made it hard to finance food and fuel imports.   Continued...

A logo is pictured on the building of Cargill International SA in Geneva August 4, 2009. REUTERS/Denis Balibouse