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Wednesday, July 28, 2021

Brazil Drought Threatens Global Orange and Coffee Supplies

Brazil, the world’s largest exporter of coffee, sugar and orange juice, is experiencing a drought during their rainy season, which may impact this year’s crops.

Soils are parched and river levels are low in the nation’s Center-South region, an area that ordinarily has a significant amount of agricultural output. The current drought is so severe that farmers are worried they’ll ruin out of water reserves that help keep crops alive over the country’s dry season. 

Mauricio Pinheiro, who lives in Pedregulho in the Alta Mogiana region in Sao Paulo, started irrigating his arabica-coffee crops in March, two months earlier than usual, after his 131-acre (53-hectare) plantation got less than half the rain it needed. 

“My irrigation reservoir is drying up now — that usually happens in August,” he said. “I’m really concerned about running out of water in the coming months,” he confessed, adding that he’s had to find another well in order to shower because his plants require so much water. 

News of the drought is coming at a time when agricultural crops are rallying to multiyear highs, which has many fearing of food inflation. Higher costs may exacerbate hunger, an on-going problem made worse by the COVID-19 pandemic. Coffee and raw-sugar contracts on the ICE Futures exchange in New York have already met four-year highs. 

Brrazil’s current orange crop shrunk 31% from last year’s season, the most in 33 years. The production of arabica coffee is also sharply decreasing. 

Rainfall was devastatingly low for many areas in Sao Paulo and Minas Gerais from January to April, said John Corbett, Chief Executive Officer at aWhere Inc. The worse hit areas received less than half of their normal precipitation, at a critical time when coffee plants need moisture for the beans to grow. It is also a period when soil stores water to survive the dry season. 

Paul Markert, meteorologist for Maxary Technologies Inc. in Maryland, said there were drier-than-normal conditions in some parts of Sao Paulo and Parana last year as well. 

Regular rainfall is expected to return sometime between October and November, instead of September, according to Celso Oliveira, aid Celso Oliveira, a meteorologist at Somar Meteorologia.

About 30% of Brazil’s orange crop and 15% of arabica coffee fields are irrigated. 

“The levels of rivers and lakes has been very concerning,” said Regis Ricco, director at Consultoria Rural, based in Minas Gerais. 

“Water reservoirs are drying up, depleted just ahead of the dry season,” Gilberto Tozatti, of Sao Paulo-based GCONCI-Group Citrus Consulting, said. “The situation is affecting most of Sao Paulo state and still harming next season’s crop.” 

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