Boston, MA -- (SBWIRE) -- 07/18/2012 -- BMI maintains its cautiously optimistic view on the Argentine port sector, as it continues to struggle with external headwinds as well as internal difficulties in the form of rising inflation and labour unrest. Economic growth in Argentina is set to moderate sharply in 2012 to 4.0% from an estimated 9.3% in 2011. Although Argentina's GDP growth remained strong in recent quarters we believe signs that a slowdown in economic activity lies ahead have already started to emerge.
While the authorities will continue to implement largely expansionary monetary and fiscal policies to support economic growth, we are sceptical that they will be enough to support the record-high GDP growth rates the country has recorded over the last couple of years. We are concerned about the long-term effects of the country's spiralling inflation on import demand, and about the impact of falling demand from China for Argentine raw material exports.
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Headline Industry Data
- Total volume at the Port of Buenos Aires is set to rise by 4.7% in 2012 to reach 12.6mn tonnes. Box handling at the same port will also grow by 4.7% to 1.2mn twenty-foot equivalent units (TEUs).
- The Port of Bahia Blanca will see a 3.2% growth in volume to 14mn tonnes. Box handling at the port will also grow by 6.6% to 32,988TEUs.
Key Industry Trends
Port Disruptions Could Leave Export Revenues On The Docks
A dock workers' strike in March could have disrupted the Argentine government's export revenues further, after reduced grain output for 2011/12 already threatens to decrease foreign exchange revenues. Labour issues are nothing new in Argentina, with the latest work stoppage pertaining to working hours and the size of shift crews. The bulk of Argentina's grain crop has yet to be harvested, but already almost US$500mn in exports remains waiting to be loaded onto ships in Argentine ports. Should the stoppage continue into April, the potential for supply disruption will increase and grain prices could receive an unexpected boost due to the export delays.
Contract To Dredge Bahia Blanca Harbour Awarded
Dutch firm Royal Boskalis Westminster and Belgium's Jan de Nul have been awarded a contract to provide capital and maintenance dredging in the port of Bahia Blanca, Argentina's main deep water port. The contract has been valued at approximately US$120mn. The maintenance contract requires the annual removal of approximately 3.8mn cubic metres (m3) of silt, over a five-year period. The depth of the harbour will be improved so that it can accommodate ships with draughts of up to 45 feet.
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