InfoSAWIT, BUENOS AIRES – The decreasing water debit in the upstream sector of Parana River, Argentina, because of the dry season, blocked the water transportation and made soyoil and biodiesel more expensive in Brazil. This really disturbed vegetable oil supply chain the regions and significantly delivered impacts to the international scale trade.
On 20 September, the depth of Parana River in the City of San Lorenzo, Argentina, as the main center to soyoil transportation was 9,44 meters, the lowest level since January 2023, according to data from maritime agency, T&T and Antares. This forced palm oil traders reduced their capacity in the tanker ships that stopped at the port of Argentine up to 5 - 12,5%, according to the market source in Argentina.
For description, if the tanker ships reduced their standard capacity up to 12,5%, it means, the ships could only transport up to 28.000 metric ton (mt) of soyoil, the numbers got decreased from the regular numbers that reached 32.000 mt. This made Brazil lack of supplies where the trader companies should seek for additional volume in Brazil to complete its exports.
As InfoSAWIT quoted from Reuters on 29 September, the price gap at Chicago Board of Trade (CBOT) was seen at the port of Paranagua, Brazil. Soyoil premium price for October delivery got increased to be 8 cent/pound to the contract price at the same board. Prior, by the early of this week, it was offered at about 1,8 cent/pound.
On 25 September, the price negotiation was about 2,5 - 5,5 cent/pound to the soyoil exchange contract for October that was equal to the price at $ 1.034 to $ 1.100 per ton FOB Paranagua. For the comparison, last week, the indicator of FOB Pranagua that was published by Argus was closed at about $ 934 to $ 1.009 per ton.
Soyoil demands in Brazil got increased. It happened for the increasing biodiesel mixture mandate from 12% to be 14% in March 2024. The increasing demands in the country minimize the export competition in the country and soyoil delivery to the port.
Brazil vegetable oil industrial association, Abiove predicted that soyoil export in 2024 could be reaching 1,15 million tons, or almost half numbers of the 2023 export volume. (T2)
