MercoPress. South Atlantic News Agency

Argentina: record crop with logistics problems

Argentina is harvesting a record crop of 82 million tons in 2005, almost 12 million over last year, but is also facing serious logistics problems because of insufficient transport and port facilities to handle the greater volumes.

The bottle neck represents up to a 20% cost increase for farmers since there's not enough storage capacity plus the 30,000 trucks circulating in the Rosario city area which concentrates the bulk of the soy bean harvest. It is estimated that anywhere from 17 to 18 million tons of grain are packed in polyethylene silos waiting to be shipped.

Gustavo Oliveiro, a logistics expert forecasts that Rosario city and the Parana river region will have to invest 4,5 billion US dollars to improve the infrastructure looking ahead, not too far away, to a 100 million tons annual crop of which 60% is shipped from Rosario.

"The insufficient infrastructure already means 4 to 6 additional US dollars which can be supported when the soybean ton is 170 US dollars but it's not the same for maize which sells at 70 US dollars the ton", argues Mr. Oliveiro.

Rosario private companies are currently investing 600 million US dollars in expanding storage capacity and port facilities but if infrastructure doesn't keep pace with improved highways and railways, "we'll be facing similar problems in years to come".

"Keep in mind that 42 million tons of grains are circulating through the port of Rosario in three months, with all the overweight and structural stress this means for the road system and railways", highlighted Mr. Oliveiro.