Heavy snow in parts of southern USA has disrupted logistics in the key export hub of the US Gulf and was likely to bring further delays, AgriCensus reported on 17 February.
Key waterways such as the New Orleans and Houston shipping channels, which are major arrival ports for agricultural imports of bulk commodities including edible oils, had also been hit by disruption, AgriCensus said.
In 2019, the Port of New Orleans in Louisiana was one of the top three palm oil ports of entry in the USA according to the WorldCity research group and Houston was also listed as one of the top 10 palm oil ports of entry.
Bringing together all modes of transportation (ocean, barge, rail, and truck), the Port of New Orleans gives ocean-going vessels access to ports 367km (228 miles) upriver from the Gulf of Mexico, linking them with the Gulf of Mexico, Caribbean Sea,
Atlantic Ocean and Panama Canal.
Due to its strategic location, agricultural imports that transit through New Orleans arrive from all over the world and some of the top origin countries are Canada, Malaysia, Indonesia, Brazil and Mexico.
The extreme weather conditions had sparked reports of forces majeures being declared in the region, AgriCensus wrote, with traders forced to trigger a Clause 20 claim under North American Export Grain Association (NAEGA) rules.
“Loading operations in New Orleans and Houston have been adversely affected by the cold and ice. There have been some NAEGA Clause 20 claims applied for - this is our form of force majeure,” a trade source was quoted as saying.
A polar vortex had brought extreme low temperatures and heavy snow to large parts of Texas – where a significant portion of US wheat exports originate – and along the New Orleans coast, hitting the primary US export hub.
“Traffic resumed yesterday in most areas. The worst is behind us now. But for certain there were a few days of disruption,” the source said on 17 February.
However, large parts of Texas remained without power, AgriCensus said.
Trade sources had also warned that as the snow melts, river levels – key components in the supply chain connecting the Midwest growing regions with the US Gulf export hub – were likely to rise, with the prospect of further delay in the weeks ahead.
“Gulf loadings have certainly been impacted along with interior loadings along the river segment. Boat line-ups in the Gulf will likely be 3-4 days behind after poor weather,” another source was quoted as saying.
“It is quite a mess, but the weather does look to warm up and improve. We have heavy snow cover in most of the Midwest, so high water levels in the river segments will likely be the next issue,” the source said.