MercoPress. South Atlantic News Agency

Downspout affects Paraguayan foreign trade freight rates

In the third week of August, the Paraguay River was one centimeter above its historical minimum

Paraguayan import/export operations, which are heavily dependent on barge transport through the Paraná and Paraguay Rivers, saw costs go up 29.2% interannually in July as lower water levels limited both navigation and the amount of cargo each vessel can carry. In the third week of August, the Paraguay River was one centimeter above its historical minimum.

With the volume of imports increasing by 20.6% yoy to 938,451 tons, the average freight price went up 7.1%. In any case, higher logistics prices are passed on to retail prices, it was explained.

Critically low water levels not only affect navigation but also increase freight costs. “We are in a quite complicated scenario, that is why we talk about a 2024/25 campaign as challenging because we have the climate with uncertainty since La Niña is visualized in the horizon and prices that are at low levels,” Héctor Cristaldo of Paraguay's Union of Production Guilds (UGP) told local media.

With higher transport costs, “between US$ 1.8 and 2 billion less will enter the Paraguayan economy in 2025,” he foresaw.

In addition, Paraguay relies on fuel imports. With barges not reaching their full capacity and sailing at lower speeds, the outlook is anything but promising.

“It is a year of concern and of great prudence, we have to fine-tune the data very well with a pencil point because the forecasts are not very encouraging, but the field does not stop and continues working,” Cristaldo went on.

He also found it difficult to forecast operating costs in the near future as low water levels are expected to persist.