Argentina's soybean crop has already taken a hard hit from the dry spell, and forecasts predict a drop of 31 percent relative to last year. It is the worst harvest in a decade, and exports are expected to fall to eight million tons for the season. Now producers face challenges getting raw soybeans and soybean oil products to market due to the same water shortage: the Parana is at a 10-year low, about 1.5 feet below the reference level, and more than 60 vessels have been affected by draft restrictions at Rosario over the past two weeks.
"The probability is that the ships will have to load two feet less than the usual," said the Rosario exchange in a statement. "The largest ships will lose loads between 3,200 and 4,300 tons."
The problems facing the soy crop are of national significance, as soy accounts for over one third of Argentina's exports overall. They also have international implications, as Chinese buyers will not be able to turn to Argentinian suppliers to offset the impact of tariffs on American soy. China has imposed a 25 percent tax on imported American soybeans in retaliation for the Trump administration's recent trade measures, and without an alternative source, Chinese mills will have to pay the tariff and buy American supplies in order to meet demand.