World’s orange supply may be at risk as Brazil has serious water problems

Brazil is the world’s biggest exporter of orange juice, but the nation just had a rainy season that brought hardly any rain. The ground is parched and river levels are low in the Center-South region, which is historically a powerhouse of agricultural output. The drought is so severe that farmers are worried they’ll run out of the water reserves that help keep crops alive over the next several months, which will bring the dry season.

The prospect of withering orange trees is coming at a time when agricultural crops are rallying to multiyear highs, which has fanned fears of food inflation. Higher food costs may exacerbate hunger, a global problem that the pandemic has made more acute.

If even irrigated areas can’t get enough water, Brazil’s orange output may decline for a second year in a row. Brazil’s current orange crop shrunk 31% from the previous season, the most in 33 years. About 30% of Brazil’s orange crops are irrigated.

While a dry spell is typical for this time of year in Brazil, it’s expected to last longer than usual, adding to concerns. Regular rains will return to the region between October and November, instead of September, said Celso Oliveira, a meteorologist at Somar Meteorologia.

Source: bloombergquint.com


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