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Drought conditions in northern Brazil are causing logistical problems due to low water levels in key waterways in the Amazon basin, leading to grain and oilseed shipments being diverted to southern ports, sources told AgriCensus.

Trading houses are reportedly shifting volumes from the Northern Arc, which comprises the land and water logistics network linking inland farms to ports in the north and northeast of the country, to the port of Santos in the southeast, according to the 11 October report.

Volumes shifted to the south were primarily corn, sources said.

“Traders are shifting logistics from Miritituba [where an important Northern Arc river port is located] to Rondonopolis, which has a railway that goes directly to Santos,” Victor Martins, Latin America risk manager at Amius, told AgriCensus.

According to sources, this is already having an impact on waiting times at the port of Santos, increasing to 13-16 days at the time of the report from 8-9 days the previous week.

Delays could affect the pace of soyabean exports through Santos, potentially benefitting US exporters during the October-February window, Martins said.

Although disruptions to Northern Arc logistics were not severe at the time of the report, there were concerns that an ongoing drought could impact Brazilian exports.

“The [dry] seasonality of rivers in the Amazon region between September and December is historical and well known,” Hidrovias do Brasil, which owns port terminals that handle the transport of soyabeans and corn through Amazon waterways, was quoted as saying in a note.

Although drought conditions had been more intense this year, navigation operations in the waterways used for the transportation of agricultural products had not yet been severely impacted, the company added.

The situation was more severe in the Amazon River, which was not a traditional route for agricultural products, the report said.

At the end of September, the Brazilian Association of Cabotage Shipowners (Abac) said transport capacity through the Amazon River could drop by 50% by the end of October and, in the week of the report, port operations in Manaus were restricted due to low water levels.

Based on historical patterns, rainfall should return to the north by November easing logistical headwinds in the region, the report said.

However, this year’s forecast of an El Niño weather pattern, which traditionally leads to drier conditions in northern and northeastern Brazil, could further hamper the transport of grain and oilseeds through Amazonian rivers, AgriCensus wrote.