Drought in Amazon Region Compels Brazilian Grain Exporters to Change Cargo Routes

According to grain exporters group Anec, the severe drought in the Amazon is causing some Brazilian grain exporters to reroute a small portion of their export cargoes to terminals in the south rather than the north as reported by Reuters.

New York Times wrote that five percent of the world’s freshwater runs through the Amazon rainforest, which is currently experiencing a severe drought that doesn’t seem to be getting better.

The drought has fueled massive wildfires that have made the air dangerous for millions of people, including Indigenous communities, and dried out major rivers at a record rate. This has probably been made worse by global warming and deforestation.

Northern routes have been crucial in helping the nation increase corn and soybean exports over the previous few years, but this spring’s challenges across shallow Amazonian rivers have disrupted them.

Brazil is the world’s largest exporter of soybeans and is predicted to surpass the United States as the leading exporter of corn this year. Brazil was the world’s top soybean exporter in 2021, with $39 billion in exports, according to The Observatory of Economic Complexity. Soybeans were Brazil’s second-most-exported commodity that year. Turkey ($1.01B), Thailand ($1.3B), the Netherlands ($1.2B), China ($27.2B), and Spain ($1.64B) are the top destinations for Brazilian soybean exports.

Anec, a trade association that represents grain traders such as ADM (ADM.N), Bunge (BG.N), Cargill (CARG.UL), and Cofco (CNCOF.UL), declined to provide further information regarding the specific companies and cargo volumes that are being diverted. Sergio Mendes, director-general of Anec, stated that he does not perceive a broad trend and that the volumes are negligible.

As stated by Anec, the drought, which has recently reduced the amount of grain shipped by barge through northern ports, won’t have an effect on Brazil’s total grain exports this year.

 Anec is sticking with its forecasts for record soy exports from Brazil in 2023 of 99 million metric tons and record corn exports of 52 million to 53 million tons.

However, Anec reduced Brazil’s October soybean and corn export projections this week by about 900,000 tons from the previous week.

It is the last few months of the corn exporting season, and Brazil has shipped the majority of its soy.

According to agricultural agency Conab, 44% of Brazil’s corn exports from January to August passed through the four major northern ports of Barcarena, Itaqui, Itacoatiara, and Santarem, with Santos accounting for about 31% of the country’s total corn shipments.

Samora, Roberto., & Mano, Ana. 2023. Reuters: Brazil grain exporters re-route some cargos as drought drains Amazonian rivers. Retrieved from https://www.reuters.com/markets/commodities/brazil-grain-exporters-re-route-some-cargos-drought-drains-amazonian-rivers-2023-10-18/ 

Lonova, Ana., & Andreoni, Manueala. 2023. New York Times: A Severe Drought Pushes an Imperiled Amazon to the Brink.  Retrieved from https://www.nytimes.com/2023/10/17/climate/amazon-rainforest-drought-climate-change.html 

Lonova, Ana., & Andreoni, Manueala. 2023. The Observatory of Economic Complexity:Soybean in Brazil.  Retrieved from https://www.nytimes.com/2023/10/17/climate/amazon-rainforest-drought-climate-change.html

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