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South American Drought Causes Concern for Barge Transportation

Supply disruptions from key South American sources could shift global buyers to pull from U.S. stocks instead

PIXABAY
PIXABAY

Over the last several weeks, drought-driven declines in water levels of the rivers of Argentina, Brazil, and Paraguay have forced barges to lower their capacities to avoid grounding.

These lighter barge loads have slowed the flow of corn, soybeans, soybean meal, and soybean oil to key export locations.

In Paraguay, parts of the Paraná River (a major artery for soybean transport) have been closed to barge navigation since the beginning of April.

According to Bloomberg, free-on-board corn export prices in Argentina and Brazil for spot, 30 days forward, and 60 days forward are being quoted at record highs.

Argentina and landlocked Paraguay depend more on barge than Brazil, which mostly relies on rail and truck for agricultural transportation.

Supply disruptions from these key South American sources could shift global buyers to pull from U.S. stocks instead.

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