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La Niña Turbocharges Drought in Brazil endangers the world’s coffee, sugar and oranges

by Tyler Durden

Global crop and food prices are at their highest levels in several years, and that could be the reason The girl, A climate pattern characterized by the cooling of the equatorial Pacific Ocean and leads to shifts in the atmosphere that cause droughts in some regions of the world and more humid conditions in others. The possibility of a severe drought in the United States has already been identified in: Previous notes. And now it appears that the worst drought in 20 years has hit agricultural-rich Brazil.

Over the past month, Brazil has faced droughts during the traditional rainy season.

“The soil is dry, river levels are low in the center and south of the country, and it is a powerhouse for agricultural production. The drought is so severe that farmers are worried about running out of water reserves that help preserve crop life for the next several months, the country’s dry season.” Bloomberg.

The cost of this year’s drought could severely affect coffee, sugar and orange crops.

Coffee grower Mauricio Pinheiro, 59, began watering Arabica coffee crops in March, more than two months earlier than usual after his 131-acre farm received half the rain it needed. It uses so much water that its wells dry up.

“My irrigation tank is running out now – and it usually happens in August,” said Pinheiro, who lives in Pedregolo in the Alta Mugiana region of Sao Paulo state. “I worry about running out of water in the coming months.”

One of the worst droughts to hit the country in decades comes at a time Agricultural prices rose to their highest levels in several yearsAnd fueling fears of food price inflation.

As much as the Federal Reserve hopes totransientInflation – changing weather patterns in the La Nina phenomenon could exacerbate food price inflation and make the problem global and persist for years.

Yields for coffee and Brazilian oranges are likely to decline for the second year in a row. The current Brazilian orange crop shrank by 31% compared to the previous season, the largest contraction in three decades, and Arabica coffee production also declined. Arabica coffee is used in Starbucks and other premium coffee chains, which means the coffee costs more.

John Corbett, CEO of agricultural technology company aWhere Inc. , “The rainfall was catastrophically low in many areas in Sao Paulo and Minas Gerais from January to April.” He said that these hardest-hit areas got less than half of the average rainfall during the rainy season.

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“Water tanks dry up and are depleted just before the dry season,” Gilberto Tossati of São Paulo-based GCONCI-Group Citrus Consulting said by phone. “The situation affects most of São Paulo and continues to hurt the harvest of next season.”

The drought also affected neighboring Argentina and Paraguay. Rivers levels are rapidly declining, forcing barges and carrying agricultural commodities to reduce capacities to avoid grounding. These light barge loads reduced the flow of corn, soybeans, soybean meal and soybean oil to major export sites.

La Niña strikes again, indicating that the Fed’s “temporary” narrative, for food at least, may not be, and higher prices could extend into 2022.

Source: Zero hedge


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