Impact on soybeans: The current severe drought conditions have resulted in insufficient soil moisture to meet the water needs of soybean planting and growth. If this drought continues, it is likely to have several effects. First, the most immediate impact is the delay in sowing. Brazilian farmers usually start planting soybeans after the first rainfall, but because of the lack of necessary rainfall, Brazilian farmers can not start planting soybeans as planned, which can lead to delays in the entire planting cycle. The delay in Brazil’s soybean planting will directly affect the timing of the harvest, potentially extending the northern Hemisphere season. Secondly, the lack of water will inhibit the growth of soybeans, and the protein synthesis of soybeans under drought conditions will be hindered, further affecting the yield and quality of soybeans. In order to mitigate the effects of drought on soybeans, farmers may resort to irrigation and other measures, which will increase planting costs. Finally, considering that Brazil is the world’s largest soybean exporter, changes in its production have an important impact on the global soybean market supply, and supply uncertainties can cause volatility in the international soybean market.
Impact on sugar cane: As the world’s largest sugar producer and exporter, Brazil’s sugar cane production has a significant impact on the supply and demand pattern of the global sugar market. Brazil has recently been hit by a severe drought, which has led to frequent fires in sugarcane growing areas. Sugarcane industry group Orplana reported as many as 2,000 fires over one weekend. Meanwhile, Raizen SA, Brazil’s largest sugar group, estimates that about 1.8 million tons of sugar cane, including sugar cane sourced from suppliers, have been damaged by the fires, which is about 2 percent of the projected sugar cane production in 2024/25. Given the uncertainty over Brazilian sugar cane production, the global sugar market could be further affected. According to the Brazilian Sugarcane Industry Association (Unica), in the second half of August 2024, sugarcane crushing in the central and southern regions of Brazil was 45.067 million tons, down 3.25% from the same period last year; Sugar production was 3.258 million tons, down 6.02 percent year on year. The drought has had a substantial negative impact on the Brazilian sugarcane industry, not only affecting Brazil’s domestic sugar production, but also potentially putting upward pressure on global sugar prices, which in turn affects the supply and demand balance of the global sugar market.
Impact on coffee: Brazil is the world’s largest producer and exporter of coffee, and its coffee industry has a significant influence on the global market. According to data from the Brazilian Institute of Geography and Statistics (IBGE), coffee production in Brazil in 2024 is expected to be 59.7 million bags (60 kg each), which is 1.6% lower than the previous forecast. The lower yield forecast is mainly due to the adverse impact of dry weather conditions on the growth of coffee beans, especially the reduction of coffee bean size due to drought, which in turn affects the overall yield.
Post time: Sep-29-2024