As Brazil runs out of water, world could lose out on coffee

Brazil, the world’s largest exporter of coffee, sugar, and orange juice, recently experienced a dry season with little rain.

In the nation’s Center-South area, a major agricultural producer, soils are parched and river levels are poor. Farmers are concerned that they would run out of water supplies needed to keep crops alive during the country’s dry season, which begins in a few months.

Pinheiro, who lives in Pedregulho in the Alta Mogiana area of Sao Paulo province, said his irrigation reservoir is drying up now. “I’m worried that we’ll run out of water in the coming months.”

The prospect of withering orange trees and coffee plants comes at a time when agricultural crops are rallying to multi-year highs, causing food inflation concerns to rise. Higher food prices can worsen hunger, which has become more severe as a result of the Covid-19 pandemic around the world. On the ICE Futures exchange in New York, coffee and raw sugar contracts have already reached four-year highs.

Brazil’s coffee and orange production can fall for the second year in a row if even irrigated areas can’t get enough water. Brazil’s current orange crop is down 31% from the previous season, the lowest in 33 years, and arabica coffee production, the high-end variety used by Starbucks Corp., is also down sharply.

From January to April, rainfall in many areas of Sao Paulo and Minas Gerais was disastrously poor, according to John Corbett, CEO of aWhere Inc. At a critical time when coffee plants need moisture to grow beans, the worst-affected areas received less than half of normal precipitation. It’s also a time when the soil stores water in preparation for the coming dry season.

That was on top of drier-than-normal conditions in some parts of the country last year, especially in Sao Paulo and Parana, according to Paul Markert, a meteorologist for Maryland-based Maxar Technologies Inc.

Although a dry spell is common in Brazil at this time of year, it is expected to last longer than normal, raising concerns. Rather than September, regular rains will return to the area in October and November, according to Celso Oliveira, a meteorologist at Somar Meteorologia.

Irrigation is used in about 30% of Brazil’s orange crop and 15% of arabica coffee fields.

“The levels of rivers and lakes have been very worrying,” said Regis Ricco, director of RR Consultoria Rural in Minas Gerais.

Francisco Sergio de Assis, a coffee grower in Monte Carmelo, a municipality in Minas Gerais’ Cerrado region, started irrigating his fields a month early because he doesn’t think his water reservoirs would last until September if it doesn’t rain.

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