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May 19, 2021

Low Water on Parana River at Rosario will Probably get Worse

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Low water levels on the Parana River at the Port of Rosario in Argentina may again impact grain shipments according to the Rosario Grain Exchange. The Grain Exchange estimates that as much as 10% of the grain scheduled to be shipped through the month of May from Rosario may have to be relocated to Atlantic ports due to the low water level.

The water level has been dropping for three consecutive months and the minimum draft needed for vessels to be fully loaded is 34 feet at Rosario and the current draft is 31 feet. The draft today means that a vessel would have to reduce its capacity by 4,500 to 5,500 tons or approximately 10%.

There are also problems with low water levels on the Paraguay River and the Parana River in Paraguay as well where there are 600,000 tons of soybeans being held at local ports waiting for improved water levels.

The situation is not expected to improve any time soon. Over the last several months, parts of south-central Brazil has entered into the driest weather in 40 years and there is very little relief in the forecast as Brazil enters into its annual dry season. As a result, the water level on the Parana River will probably continue to decline and will only improve when the summer rainy season returns to southern Brazil in September or October.

Last year Argentina negotiated with Brazil and Paraguay to increase the discharge of water from the Itaipu dam in order to increase the water level of the Parana River. Once they started to release more water, the situation at the Port of Rosario improved significantly. It may be more difficult to convince Brazil and Paraguay to release more water this year because Brazil is already concerned about low water levels in the country's reservoirs and the potential for shortages of electricity.