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Floods, grain demand limit Nola barges

07 Mar 2018 18:07 GMT
Floods, grain demand limit Nola barges

Houston, 7 March (Argus) — Flooding along the lower Mississippi river and strong grain demand has tightened spot barge availability at New Orleans, limiting the ability for fertilizer loadings at the key port.

One fleet operator said about 80pc of its barges for spot shipment were not available at Nola because of high river flows and stronger southbound grain demand, resulting in empty barges traveling north.

Nola barge availability began to shrink in late February when the US Army Corps of Engineers closed five locks and dams along the Ohio and Arkansas rivers, marooning a large portion of the domestic barge fleet. Rising water levels also prevented operators fromrepositioningthe remaining fleet, as tow sizes were limited to 5-10 barges on the lower Mississippi river.

Barge operators are struggling to dispatch spot barges for grain shipments amid a recent price rally for corn and soybeans. Grain sales have increased in recent weeks on higher prices and stronger global demand, resulting in higher freight prices for southbound transit. The volume of soybeans inspected for export for the week ending 1 March was up by 14pc year-over-year, despite St Louis being the only major terminal operating without restrictions, according to the US Department of Agriculture.

Rising river levels have also delayed vessel arrivals at Nola after the US Coast Guard restricted port berthings to daylight hours only. The long port delays have already caused a potential deal for a first-half March urea vessel from Venezuela to be scrapped.

The delays could impact up to nine expected urea vessel arrivals in March. One vessel, the Thor Independence, was scheduled to arrive on 5 March from Algeria, but has yet to enter the port area, according to vessel tracking data. Two phosphate vessels are scheduled to arrive this month as well.

Water levels in New Orleans are expected to crest on 13 March at around 17 feet, according to the National Oceanic and Atmospheric Administration. The corps anticipates opening of the Bonnet Carre Spillway on 8 March for an estimated 20-25 days to alleviate water flow rates on the Mississippi river. The opening is expected to further delay vessels from discharging at Nola.