Argentina's rising grains production strands vessels in river traffic

Thu Feb 16, 2017 1:24am EST
 
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By Hugh Bronstein

ROSARIO, Argentina (Reuters) - When a boat carrying soy oil destined for India ran aground on the Parana River near Buenos Aires in late January, ships loaded with most of Argentina's grains exports were blocked for hours.

It was the latest accident on one of the world's great food highways, which is straining to carry rising volumes of Argentine agricultural products embarking on the first leg of the journey from the fields of the Pampas to the feeding troughs of cattle, pigs and chickens worldwide.

Increasing congestion on the Parana, which carries 80 percent of Argentina's grains exports, could hamper President Mauricio Macri's efforts to expand farm output and pull the country out of recession.

Macri wants Argentina to grow 25 percent more grains to boost rural income and has cut export taxes to attract more investment in the sector. But to haul all that grain to market, Macri needs the log jams on the river to end.

The government is studying how to accommodate the growing flotilla plying the waterway without driving up shipping costs - which could cancel out the benefits of the export tax cut to farmers and agricultural businesses.

"The entire river system is at its current limit," said Koen Robijns, Argentine operations manager for Jan De Nul, the privately-owned, Luxemburg-based company that operates the Parana and is responsible for dredging.

The grounding in January made commerce grind to a halt, Robijns said in an interview aboard one of the company's dredging vessels near Argentina's main grains hub of Rosario, some 300 kilometers northwest of Buenos Aires.

"Every ship behind it, all the way up to Rosario, had to stop or slow down for more than an hour," he said.   Continued...

 
Grain is loaded onto ships for export at a port on the Parana river near Rosario, Argentina, January 31, 2017.  Picture taken January 31, 2017. REUTERS/Marcos Brindicci