CHICAGO/MEXICO CITY, Oct 14 (Reuters) - Mexican rail
consortium Ferromex and U.S. railroad company Union Pacific Corp ( UNP )
said they have stopped issuing permits for some grain rail
shipments moving through Eagle Pass, Texas, after a recent train
derailment in Mexico closed the track.
The halt is a temporary measure until rail traffic gets
cleared after the track reopened, Ferromex told Reuters in a
statement Monday, adding that total volume of grain movement
between Union Pacific ( UNP ) and Ferromex will not be affected.
The disruption marks the latest in a string of grain freight
rail backlogs at the border, particularly at El Paso and Eagle
Pass, that have snarled agricultural supply chains between the
U.S. and the top importer of its corn. It comes as U.S. farmers
are harvesting massive corn and soybean crops.
Ferromex (FXE), which operates the largest railway in
Mexico, notified Union Pacific ( UNP ) about the derailment in Mexico on
Saturday, according to Union Pacific ( UNP ). FXE told Reuters the track
was closed up to 15 hours.
Union Pacific ( UNP ) said it and Ferromex decided together to
temporarily halt issuing permits for the active FXE embargos,
given the high volume of agricultural freight and expected
increased demand as the U.S. harvest is underway.
"This suspension is effective immediately and will remain in
effect until the current train lineup is cleared and trains are
able to launch upon release," Union Pacific ( UNP ) said in a statement
to customers Saturday.
While Mexico is the top U.S. corn export market, it's also
become a key outlet this year for agricultural exporters looking
to offset sluggish buying from China, a top commodity buyer.
But rail capacity cannot keep up with the demand, said Juan
Carlos Anaya, General Director of the Agricultural Markets
Consulting Group.
"The infrastructure cannot be built overnight, nor can the
machines, and that is causing this problem of having efficient
logistics between the United States and Mexico," Anaya said.