Tumult Grows in Soy-Export Hub on Argentine Minister’s Death - Bloomberg
A cargo ship transports cattle while traveling through the Parana River near the Port of Rosario in Rosario, Argentina, on April 23.
Photographer: Sebastian Lopez Brach/Bloomberg
• Transport chief was in charge of tender to dredge Parana River
• Last-gasp extension tides over crop exporters for 90 days
Argentine farmers struggling to ship their crops through increasingly shallow rivers may soon face a new obstacle: One of the world’s key soy waterways needs to be dredged, and there’s no firm plan for who will do it.
The government in agricultural powerhouse Argentina has had months — even years — to draft the terms of a tender to dredge the Parana River, the source of most of the world’s soy meal for livestock feed and soy oil for cooking and biofuels. But companies eying the new multiyear contract are still in the dark and, compounding the uncertainty, the man in charge of what exactly is up for grabs, ex-Transport Minister Mario Meoni, died in a car crash last week.
With the future of millions of tons of crop cargoes at stake, the turmoil couldn’t come at a worse time: Argentina’s soybean and corn harvests are in full swing, and the company holding the expiring contract is working overtime to keep the river channel deep enough for ships to load them as years of dry weather shallow out water levels.
Policymakers continue to work under instructions left by ex-minister Meoni, a spokesman for the Transport Ministry said in a phone message, declining to give more details.
The contract to dredge the river — from crop-export hub Rosario down to the estuary at Buenos Aires about 500 miles away — is currently held by Belgian company Jan de Nul in a partnership with Argentina’s Emepa. Jan de Nul and Emepa’s contract was set to expire on April 30, though the government published a last-minute resolution on Thursday extending it for 90 days. It’s unclear if that gives transport officials enough time to pull a tender together for bidders.
The partnership has dredged the Parana since 1995, with the last contract extension signed in 2007.
Dredging the Parana is worth around $200 million a year in tolls. The recommendation by industry groups is for the new contract to last 15 years, which would mean revenues for the winner of $3 billion.
To farmers and agricultural traders who ship 80% of Argentina’s crops down the Parana, the waterway is worth a whole lot more: over $20 billion a year in exports.