MEXICO CITY (Reuters) - Global commodities trader Cargill Inc [CARG.UL] does not expect a significant impact on freight costs or logistics from the massive flooding caused by Hurricane Harvey in Texas and Louisiana, its top executive said on Friday.
Cargill Chief Executive Officer David MacLennan said while it was still too early to assess the full impact of the storm on U.S. farm trade from nearby ports, he suspects freight rates have inched up but that the change would likely be minimal.
“I think it’s still early to tell, but I think it will not have a significant impact on freight and the logistics of agriculture products coming down the Mississippi River and into the port of New Orleans,” said MacLennan.
Barge rates are not impacted by adverse weather conditions in the Gulf of Mexico, and ocean container rates “might spike over the short-term” but increases will likely be temporary, Cargill spokeswoman Valeria Olson wrote in an email.
Operations at Houston’s port will not fully re-open until early next week following plant inspections and the resumption of rail freight service, she said.
Cargill, which has not experienced any price spikes in rail rates, does expect to see an increase in certain types of freight to the region as relief and rebuilding efforts get underway in Texas and Louisiana, she added.
MacLennan also said he was “cautiously optimistic” that the outcome of talks to redo the North American Free Trade Agreement would be beneficial for Canada, Mexico and the United States and that it would be a mistake to ditch the pact.
While he said an updated NAFTA should allow for “greater convergence for food safety and animal health regulation,” the deal overall has been a boon for the region’s farm trade.
The executive said agriculture trade under NAFTA has grown from roughly $9 billion to $39 billion over the 23-years that the accord has been in effect.
Editing by Jeffrey Benkoe and Alistair Bell