Research and Markets: Argentina Freight Transport Report Q4 2010 - In 2010, It is Expected That Freight Carried by Rail is to Rebound by 1.45% to 10.06Bntkm

DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/f67062/argentina_freight) has announced the addition of the "Argentina Freight Transport Report Q4 2010" report to their offering.

The Argentina Freight Transport Report provides industry professionals and strategists, corporate analysts, freight transportation associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Argentina's freight transportation industry.

Q310 saw a major development in the advancement of Argentina's freight transport sector. The government announced in July that it had secured a US$20bn credit agreement with the China Development Bank to carry out much-needed repair and modernisation work on the country's much maligned railway network after a state visit paid by President Cristina Kirchner to Beijing.

After several years of inaction, the pleas of farmers for a better rail freight network appear finally to have been answered: the first chunk of funding, worth a reported US$2.5bn, expected to be invested in improving the two main rail lines dissecting Argentina's north and central regions, which comprise the country's main areas of agricultural and mineral production. The renovations are expected to take place over a period of four years. An additional US$1.85bn will be spent on developing the Belgrano railway, which links Buenos Aires with the country's northern provinces and reaches as far as the Bolivian border. The destination of the remaining funds has yet to be decided, though it is expected to include modernisation of the underground rail services of Argentina's two largest cities, Buenos Aires and Cordoba.

BMI believes investment in Argentina's rail freight sector will help iron out the kinks in the country's supply chain and increase its competitiveness as a major exporter of grains and other raw materials. According to the Rosario grain exchange, the freight tonne-km cost of transporting grain by road is US$0.7 per dollar, about twice the price of transporting by rail or four times the cost of maritime freight. A cheaper, more efficient supply chain should put Argentine producers on a more even footing with other major suppliers such as the US and Canada.

With a brighter long-term outlook assured, the immediate forecast for Argentine rail freight is also positive. In 2010, we expect freight carried by rail to rebound by 1.45% to 10.06bntkm, while the total tonnage carried by rail will gain 1.45% to 19.9mn tonnes. We expect this performance to continue into 2011 when freight carried will grow to 10.23bntkm and total tonnage will increase to 20.29mn tonnes. Argentina's major ports meanwhile remain on course to complete a moderate recovery in 2010 as forecast by BMI at the beginning of the year. At the Port of Buenos Aires (POBA), we are sticking with our forecast of a modest 3.7% rebound in total tonnage throughput rebound in 2010 with cargo volumes set to reach 8.92mn tonnes. We expect the rate of growth to accelerate slightly in 2011 when throughput should grow by 4.7% to 9.34mn tonnes. We see the Port of Baha Blanca (POBB)'s total tonnage growing by 2.9% to 11.3mn tonnes in 2010 before accelerating to 3% next year when the facility is projected to handle 11.65mn tonnes.

Though relations between the government and Argentina's agricultural producers have appeared more stable in 2010 relative to the turmoil of 2008 and 2009, ongoing disputes between the two parties, including port blockades by the URGARA farmers union in June continue to place downside risk to our trade forecasts. Added to this has been a Chinese ban on Argentine soy oil which has dragged on since March, following the escalation of a trade dispute between the two countries. That said, we continue to see imports gaining 18.8% in value in 2010 to US$81.2bn, while exports will gain 21.7% to US$108.2bn. In real terms, import growth will be a much more modest 2% this year, with exports doing significantly better at 5%. Looking to 2011, we expected the country's trade volumes to accelerate slightly with imports and exports growing by 4% and 5% respectively in real terms.

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