This map shows how Brazil’s current precipitation patterns deviate from the mean precipitation patterns calculated over the past 10 years. Red shading indicates areas experiencing drought stress and blue shading indicates areas experiencing above average rainfall.
Brazil has started 2019 on a dry note. Across large parts of the states that comprise Brazil’s principal agricultural sector, there’s been no precipitation in over three weeks, and weather conditions in the rest of the country haven’t proven favorable either.
As recently as December, Brazil was widely expected to see a bumper soybean crop for the current season, but drought conditions have worsened in recent weeks and production estimates have been cut as a result. In Mato Grosso state, Brazil’s soy-production workhorse, harvest started historically early in some municipalities, but production may be slashed by up to 5 million tonnes if the current drought persists. Harvest should begin early for other key oilseed-producing states as well, if rains return soon. At the moment, however, uncompromising weather continues to torment Brazilian soybean producers.
Soybean farmers aren’t the only victims of parched soils; Brazilian sugarcane producers have taken a hit from the drought as well. Globally, sugar stocks currently sit at record highs, but prices have jumped over the past week in response to the continually weakening outlook for the 2018/19 Brazilian crop. Sugar prices dropped to a three-month low of 11.69 cents/lb on Jan. 3, but jumped 6 percent to 12.65 cents/lb on Monday.
Sugarcane exports from Brazil are currently estimated to total roughly 20 million tonnes for the 2018/19 crop, the lowest figure since 2007. The world’s other sugar producers have picked up the production slack this year, and while global production still routinely outstrips consumption, the recent sugar-price spike is a reminder that Brazil’s influence still looms large in dictating sugar markets.
Gro Intelligence subscribers can stay up to date on the latest developments in Brazil’s agricultural industry.
The map on the left shows the relative contribution to sugarcane production of each of Brazil’s sugarcane-growing states. The map on the right illustrates the same, but with respect to soybean production. Darker blue and green shading indicates more production in sugarcane and soybeans, respectively.