Why the historical downpipe of Paraná is another headache for the economy

Since 1884, the port of Rosario has had a hydrometer that measures the height of the Paraná River. In recent weeks, the number he threw was between 40 and 50 centimeters. It is the lowest value in almost half a century, since you have to go back to 1971 to find a similar measurement. And there is no historical antecedent in 136 years of such a downspout for this time of year.

This situation has generated the viralization of numerous images in which islands appear in unusual places, cows crossing the watercourse as if it were a mountain stream or the sad postcard of stranded fish.

But it is also one more headache for a recession-sick Argentine economy, in a situation that worsened since the end of March when the Covid-19 pandemic forced the government to establish a quarantine that halted activity.

According to data from the National Institute of Statistics and Censuses (Indec), analyzed by the Chamber of the Oil Industry of the Argentine Republic (Ciara) and by the Cereal Exporters Center (CEC), 41 percent of Argentina’s total exports correspond to the oil-cereal complex (soy, corn, wheat and sunflower).

And according to estimates by the Rosario Stock Exchange (BCR), 67 percent of grains and more than 90 percent of flours and vegetable oils leave from the 29 port terminals located 70 kilometers from Paraná, in the Great Rosary.

In conclusion, this area is the platform for the largest dollar factory in Argentina and, therefore, a downspout that complicates the transit of ships in one of the times of greatest demand – Argentina is in the midst of harvesting soybeans and corn – is another unexpected obstacle to economic recovery.

Impact

In a online workshop that took place last Friday, the Rosario Stock Exchange analyzed the impact that this is already generating in the agro-export industry.

The study, presented by the entity’s director of Research and Economic Studies, Julio Calzada, calculates that this situation has already cost companies $ 244 million.

One of the losses is due to the large transoceanic ships that are forced to leave with less merchandise. The “Panamax”, for example, have a total cargo capacity of between 60,000 and 65,000 tons, of which they usually load between 40,000 and 45,000 in the Gran Rosario and the rest complete it in the marine ports of Bahía Blanca or from Necochea.

But for that they need a minimum depth of 34 feet in the Paraná, and the company in charge of dredging is barely guaranteeing 30 feet. For this reason, these ships depart with between 8,000 and 10,000 tons less, which they complete in the southern part of Buenos Aires.

The problem is that this situation forces exporters to take the merchandise to that region, which has a higher logistical cost of around $ 25 per ton, compared to taking it to the Gran Rosario.

Another issue that is happening is that Argentine soybean oil is trading up to $ 60 per ton below the Brazilian one. “Tanker ships are staying in the ocean storing oil. So there are few available, and when you add to that the traffic problems in Argentina, they charge more expensive freight, which affects the price of the merchandise, ”said Calzada.

Also this situation It affects the quality of soybeans exported by Argentina because the barges from the oilseeds that the agro-export terminals use to mix them with local products take time to arrive, to raise protein levels.

As if this were not enough, in the last hours an additional problem arose: a collapse in the navigation channel through which the ships transit.

The president of Ciara-CEC, Gustavo Idígoras, acknowledged in this regard that the ships are loading even less than what they had already been loading due to the historic descent of the Paraná.

Negative prognosis

At workshop Organized by the BCR, two representatives of the National Water Institute (INA) also spoke, making it clear that this situation was unpredictable, extraordinary and does not seem to have a solution in the short and medium term.

Carlos Paoli, associate researcher at the INA, pointed out that there were already very low flow records, such as the 9,600 cubic meters per second that Paraná currently has, but they are all before 1970.

The average annual minimum since that year is 1.87 meters and the probability of suffering a downspout like the current one, according to statistics from the last half century, is two percent (one every 50 years).

Juan Borus, deputy manager of hydrological information and alert systems at INA, provided other eloquent information: one of the main tributaries of the Paraná, the Paraguay river, had the largest drop in its history last year: in just four months, between June and September, it lost 7.2 meters in height.

Rain anomaly maps show that the dry climate prevailed throughout the Paraná basin.

“I have never seen a situation like the current one. We are in an extremely dry scenario at the regional level. This downward trend does not seem to end in the medium term, “said Borus.