Low South American River Levels Hindering Crop Shipments

Rivers throughout South America have reached such low levels in recent days and weeks that shipments of grains and oilseeds have been hindered, though the effects at this time are not catastrophic for export levels as it is not peak trading season, ag groups have said.

Water levels in the rivers that run through the vast Amazon rainforest have been falling after a record drought, with navigation difficult and water becoming too dirty to consume https://t.co/EPCGPsyhE4 pic.twitter.com/6Kc79hUZKp

— Reuters (@Reuters) September 9, 2024

Amazon River Levels Hindering Navigation

Reuters’ Lisandra Paraguassu reported that “last year’s record drought in the Amazon and less than usual rainfall since caused river water levels to drop rapidly, hindering navigation by barges carrying grains for export and cutting off communities that depend on river transport.”

“The Brazilian Geological Service (SGB) has warned that water levels have been falling since June and all rivers in the Amazon basin are expected to drop below their historical levels,” Paraguassu reported. “…Following last year’s drought, barges were prevented from using some ports on the Amazon river, and the outlook for this year is even worse, said consultancy ARGUS.”

“‘This could lead to the redirecting of grain and fertilizer cargoes in the coming months to Itaqui and other ports in the south and southeast of Brazil,’ ARGUS said in a study that forecasts increased shipping costs for producers,” according to Paraguassu’s reporting. “…Across the Amazon region, communities are facing isolation due to lower river navigability. Residents cannot travel to buy food, and crops are being harmed, besides the fish that are killed when streams dry up, hurting riverside communities that live from fishing.”

Paraguay River Facing Low Levels, Too

Reuters’ Daniela Desantis and Lucinda Elliott reported that “South America’s Paraguay River, a key thoroughfare for grains, has hit a record low in Paraguay’s capital Asuncion, with water levels depleted by a severe drought upriver in Brazil that has hindered navigation along waterways in the Amazon.”

“The depth of the Paraguay River, measured versus a “zero” index rather than the riverbed, has dropped below minus 0.82 meter, breaking the previous record low in October 2021, data from the national Meteorology and Hydrology Directorate shows,” Desantis and Elliott reported. “The body expects the river will keep falling with no rain forecast.”

“The Parana River in Argentina is also near year lows around grains hub Rosario. Both the Paraguay and Parana rivers start in Brazil, eventually joining and flowing into the sea near Buenos Aires. They are important routes for soy, corn and other trade,” Desantis and Elliott reported.

“‘In the northern section (of the Paraguay waterway), navigation is practically halted due to the extreme drop in water levels,’ the Paraguayan oilseed and grain crushing chamber CAPPRO told Reuters in written comments,” Desantis and Elliott reported. “The chamber, whose grain-trader members handle some 60% of Paraguay’s soybean exports, said the low river was hitting shipments, though the impact was capped as it was not peak trading season.”

Brazil Experiencing Wildfires Alongside Drought

Bloomberg’s Dayanne Sousa and Clarice Couto reported last week that “first came wildfires that scorched sugar cane fields. Now, the worst drought in more than four decades is threatening coffee and soybean crops in Brazil.”

“From May through August, some key agriculture areas faced the driest weather since 1981, according to natural disaster monitoring center Cemaden. And there is no relief in sight: there’s no rain in the forecast for at least two more weeks, a period when coffee trees usually flower and farmers start planting soy,” Sousa and Couto reported. “The lack of rainfall poses risks for global crop supplies in a world that’s become increasingly dependent on Brazil for everything from sugar to coffee and soybeans. Losses could amplify financial stress for Brazilian farmers already contending with a steep decline in prices.”

“Regular showers that are typical of Brazil’s spring likely will be delayed to late October, said Rural Clima meteorologist Marco Antonio dos Santos,” Sousa and Couto reported. “Below-average rains expected for September and October could also drive farmers in Mato Grosso to postpone soybean sowing until better humidity, according to AgRural analyst Daniele Siqueira. Growers that choose to sow crops while soils are still dry may need replant. Delays to soybeans could also push back other crops that usually go into the ground later in the year such as cotton and corn.”