The low water levels on the Danube, depressing grain exports from countries such as Hungary, Romania and Serbia, may last until spring even as rain has revived the Rhine’s barge trade.
Rains in Germany and Switzerland have brought a “great improvement” in grain shipment along the Rhine, where barges had been forced to run only 30-50% full to avoid running aground, Jaime Nolan Miralles at FCStone’s European office said.
The Rhine is a key route for transport grains from Germany, the European Union’s second-ranked producer, north west to the Netherlands and its sea ports.
However, in the Danube, sources said “disruption is still in place”, Mr Nolan said, an observation backed up by a report from US Department of Agriculture officials that more than 100 cargo vessels had been blocked in in Serbia alone, situated about half way along the river.
Rains in the Danube basin, which also include parts of Austria, Hungary and Slovakia, have been insufficient to lift far transport prospects on Europe’s second-longest river, after the Volga.
‘Significant damage’
“Low waters are blocking the season exports of grains from not only Serbia, but Hungary, Romania and Bulgaria,” USDA staff based in the Serbian capital of Belgrade said.
“Serbian traders are not able to deliver the main agricultural commodity export, corn, to international buyers and previously booked sea vessels at the Black Sea.”
The Danube runs east from German to Ukraine, and is used for trade westward as well as to Black Sea ports.
And, with winter coming when precipitation will get trapped as ice and snow, “some transportation companies are predicting that water levels not improve even before spring time”, the USDA staff said in a report.
“This will cause significant damage to the economies of all countries whose exports and imports of cargoes depend on Danube river transportation.”
Trade beneficiaries
The setback has halved Serbian corn exports and cut prices of the grain nearly to the equivalent to $200 a tonne on the Novi Sad commodity exchange, from $328 a tonne in July, the briefing said.
The beneficiaries of the river transport problems – a reflection of the dry autumn which has also set back eastern European grain and rapeseeed seedlings have included the UK and potentially Scandinavia, which have been called on to provide replacement supplies.
Agrimoney.com knows of one leading merchant which last week was called upon, and succeeded in providing, in four days sourcing and providing a 6,000-tonne order from a continental client caught out by the barge disruptions.
However, this may not necessarily feed into persistent support for prices in these countries, a UK grain trader said.
“It is not as if the overall demand is increasing, and on the supply side there is plenty of wheat around,” the trader told Agrimoney.com.
“It is just that, at the moment, the wheat is not coming from the place it would usually be coming from.”
