February 16, 2015

16% of Brazil's Municipalities Declare Emergency due to Drought

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The dryer than normal weather in Brazil during this summer's rainy season has resulted in 16.8% of the municipalities in the country to declare a state of emergency due to low water supplies. According to data from the Ministry of National Integration, which tracks decrees made by Brazil's local and state governments, of the 5,570 municipalities in Brazil, 936 have declared a state of emergency as of February 2nd due to prolonged drought. The northeastern region of Brazil has been hardest hit and in the state of Ceara for example, 95% of the municipalities have made the emergency declaration.

Southeastern Brazil, which includes the largest cities in Brazil, has also felt the impact of the dry weather and the long term forecast does not look encouraging. The meteorological agency Climatempo is forecasting that southeastern Brazil will receive 49% of its normal rainfall in February, 53% of its normal rainfall in March and 68% of its normal rainfall in April, which is the last month of the summer rainy season. These forecast were made by Alexandre Nascimento from Climatempo at an energy conference held last week. If his forecast is correct, the implications for the electric supply and the water supply in southeastern Brazil are very serious.

Analysis of the electrical sector indicate that a minimum of 70% of the normal rainfall would be needed during February-March-April to avoid electrical rationing. Blackouts and water shortages have already occurred in southeastern Brazil during this summer's rainy season and the electrical and water situation is expected to deteriorate when the dry season starts in May and continues until October.

The forecast for northeastern Brazil is even more ominous. Climatempo is forecasting that northeastern Brazil will receive 21% of its normal rainfall in February, 28% of normal in March, and 32% of normal in April. If verified, the number of municipalities declaring a state of emergency is expected to increase dramatically.

Farmers in Brazil are also closely watching these long range forecasts as well. If these forecast are correct, agricultural sector could see lower production for such crops as coffee, sugarcane, corn, and soybeans.