Brazil, the world’s largest producer of sugar and coffee beans, is facing the most severe drought in 91 years, affecting local hydropower and agricultural production, related crop commodity prices soared, coffee bean futures on Friday (28) more soared to a new high since 4 1/2 years.
The Brazilian Ministry of Agriculture’s Meteorological Monitoring Agency issued the first emergency drought alert, saying that rainfall in five states in the country from June to September may remain scarce. As for the Ministry of Mines and Energy also expects that drought will continue in the coming months, especially in the southeast and the Midwest.
The market is worried that the lack of soil moisture in Minas Gerais, an agricultural town in southeastern Brazil, could affect the coffee bean harvest in the 2022 harvest year.
The misfortune is not only the impact of drought on food cultivation and livestock, but also on Brazil’s high dependence on hydroelectric power generation, the implementation of zoning power supply doubts rise, and dry weather may lead to serious fires in the Amazon rainforest and the Pantenal wetlands.
The Commission for the Supervision of the Electricity Sector (CMSE), which belongs to Brazil’s Ministry of Mines and Energy, said on Thursday (28) that the Paraná River basin in central and southern Brazil has been hit by a prolonged drought, urging the water regulator ANA to declare a “water shortage”.
CMSE stressed that at this stage, it is quite important to relax restrictions on hydroelectric power plants to allow some areas to generate more energy or energy storage. However, politicians, ANA and Ibama, the environmental protection agency, must first conduct a very difficult consultation.
Sources pointed out that although Brazil has no intention of implementing zoned power supply yet, the government has no other choice if it does not relax the restrictions on hydroelectric power generation.
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