Low River Levels Are Crippling South American Grain Highway

South America’s Parana River system is one of the continent’s most important. The second longest river after the Amazon, it arises in the central Brazilian plateau at the confluence of the Grande and Paranaiba rivers. It drains 1.08 million square miles of southeastern Brazil, Paraguay, parts of Bolivia and northern Argentina.  Its waters power the Itaipu hydroelectric dam, a joint venture between Brazil and Paraguay, which share its 12,600-megawatt output. Below the dam, it has been called a “grain superhighway,” normally transporting 80 percent of the grain exports of Argentina, the world’s largest exporter of soymeal livestock feed and the No. 3 exporter of corn and raw soybeans, as well as 30 percent of Paraguay’s soybean exports.

But these are not normal times. A prolonged, unprecedented drought in southern Brazil and northern Argentina has resulted in the lowest water level on the Parana River at Rosario, Argentina, in more than 50 years and the lowest ever recorded during April. In mid-May, 152 Paraguayan barges loaded with 220,000 metric tons of soybeans and corn were reported trapped by low water levels on the key river. Barges are being forced to light-load, topping off in deep-water ports near the river’s mouth.

March, April and May are Argentina’s soybean harvest season, so the low water couldn’t have come at a worse time. By mid-May, the lower water was estimated to have cost grain exporters $244 million due to slower grain loadings.

The Argentine government urgently negotiated with Brazil and Paraguay to release additional water from Itaipu Dam to help boost water levels. Beginning May 18, according to Soybean and Corn Adviser, the spillway of the dam was opened for nine hours each day, to continue for 12 days. Operators of Yacyreta Hydroelectric Dam, located downriver on the border of Argentina and Paraguay, also agreed to increase discharges from their reservoir.

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According to the Itaipu dam operators, these releases increased the water level at Rosario by 2 to 3 meters, which helped move exports, at least temporarily. The increased discharge was expected to lower the water level in the Itaipu reservoir by 1.5 to 2 meters.

On May 11, Juan Borus, an expert at Argentina’s National Water Institute, told the Rosario Board of Trade the low water could continue for the rest of the year. He said heavy rains to replenish river levels weren’t expected until the end of Argentina’s spring.

Juan Carlos Munoz, head of the Center for Rivers and Maritime Owners of Paraguay (CAFyM), told Agricensus that the low water was delaying the completion of Paraguay’s export program from the end of July to September or October.