MercoPress. South Atlantic News Agency

Over 90 bulk grain carriers queuing in the River Plate

The Argentine farmers' conflict has the River Plate packed with grain bulk carriers waiting to load in Buenos Aires and Rosario (up the river Parana). An estimated 90 vessels are queuing with the tail reaching the access to the port of Montevideo, in neighboring Uruguay.

According to estimates from shipping agents published in the Argentine press each vessel "parked" in the River Plate has a daily cost of 50 to 60.000 US dollars per day for whoever chartered it, totaling in the range of 5 million US dollars for the estimated 90 bulk carriers. But waiting in the Rive Plate at least helps to save the Paraná River toll when vessels sail up to Rosario, the world's leading soy export port. However another problem is looming, who will pay for the delay costs? Experience when similar situations indicate that most probably the importer, who will then bill it on the following freights. Furthermore the largest grain bulk vessels, of the Panamax class, which can only load a limited volume in Rosario (70%) because of draught problems, normally complete their cargo in Bahia Blanca. But since silos in Bahia Blanca are empty because of the farmers' conflict, vessels prefer to finish loading in Brazilian ports. Another complication stems from the workings of commodities trade since crops are sold in the future's market with a certain delivery date. But since many providers can not honor delivery, contracts are falling. Nevertheless in spite of the difficulties reports from Argentina's cereal and oil seed exporters show that to the end of May, shipments of soy were up one million tons over last year and regarding corn, 750.000 additional tons. So far 25% of the total 2007/08 Argentine harvest of 95 million tons has been shipped, equivalent to 9.8 billion US dollars which is 50% above the same period a year ago. But this also means that 70% of the crop remains unsold or non-traded. In Rosario at this time of the year an estimated 500 trucks are unloading in port facilities. But because of the conflict in the last few weeks the number which was in the range of 250/260 dropped to nil, according to Rosario grain dealers.