Argentine Refinery Closure May Reduce Diesel for Corn Growers

(Bloomberg) — An Argentine government order to close Royal Dutch Shell Plc’s oil refinery in Buenos Aires on environmental concerns will shrink supplies of diesel fuel for farmers to sow corn and soybeans for next year’s crops.

Corn growers in Argentina, the world’s second-largest exporter of the cereal, plan to boost planted acreage by 14 percent this year for next year’s harvest, according to the Buenos Aires Cereals Exchange. Farmers in the South American country began planting corn last month.


Shutting Shell’s Dock Sud refinery will reduce Argentine diesel oil output by 12 percent, creating a shortage for farmers that need to fuel tractors, Juan Aranguren, head of Shell’s operations in Argentina, said in Buenos Aires yesterday.

That may shrink the acres planted with oilseeds and cereals, said Ricardo Baccarin, a Buenos Aires-based trader at Panagricola.

“There could be a lack of diesel in a critical moment,” Baccarin said. “We have to sow 25 million hectares (61.8 million acres) in the next 60 days.”

Bloomberg