A stretch of the Mississippi River was reopened on Wednesday in a glimmer of hope for halted US grain exports, but power outages, stranded barges and floodwaters remained major hurdles after Hurricane Katrina.
Grain traders, analysts and company officials said some export business might be lost to South America if Gulf ports do not reopen soon, and that some shippers were seeking alternate US locations to export corn, soybeans and wheat.
"Some vessels waiting outside port will not be able to berth until conditions are normalised - it is uncertain at this time how long that will be," said Gary Martin, chief executive of the North American Export Grain Association.
The association said the Gulf Coast accounts for 55 to 65 percent of US corn, soybean and wheat exports. It said the Gulf handled 59 percent of the 50.2 million tonnes of grain exported through all US ports so far this year.
US Coast Guard spokesman John Miller said a 500-mile stretch of the Mississippi River, the primary conduit for grain and other commodities such as steel to Gulf ports, was reopened to tug boats and barges because it was considered safe.
He also said aerial surveillance of the Gulf Coast showed that 60 barges had run aground on the Mississippi River, but was unable to determine if they were hauling cargoes.
The United States, the world's top exporter of corn, soybeans and wheat, is expected to earn a record $63.5 billion from farm exports in fiscal 2006 starting October 1, up from a revised $62 billion in the current fiscal year.
Some grain analysts felt that any prolonged delay in reopening Gulf ports to export shipments could send some business to Brazil and Argentina, the world's second- and third-largest soybean exporters after the United States.
"There have already been a few cargoes of beans done to Argentina, which should have come here. This is just not good for business no matter how you cut your mustard," said grain analyst Charlie Sernatinger of O'Connor & Co.
Rich Feltes, director of research at Refco Inc, said: "We've now raised the specter of potentially shifting some business to South America that might have come to the US"
"Until this ship channel is cleared of both debris and the buoys reset and marked, there will be no traffic in or out of there. The longer that goes on, the more our foreign customers will either be trying to source off the West Coast or in the case of beans potentially move down to South America."
Grain traders said the Pacific Northwest was a possible alternate export point if the resumption of operations at the Gulf Coast is held up further. They said another alternative would be shipping grain through the Great Lakes.
Lisa Graham-Peterson, spokeswoman for CHS Inc, a farmer-owned grain company, said none of the firm's barges on the Mississippi River were affected by Katrina, denying rumours in the market. "All of our barges came through intact."
She also said there had been no material damage to the CHS grain elevator at Myrtle Grove, Louisiana, according to two accounts. But she said the two persons did not get close enough to the facility to make a proper assessment.
"There is no road access, and there is no power in the area. And they don't anticipate any road access until after the Labour Day weekend," she added.
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