Devastating Floods in Brazil Threaten International Soybean Supply

International

Entered 2024.05.04 04:25 Modified 2024.05.04 04:25

Large farms in the world’s largest soybean producing area are severely damaged … “The futures market is already shaking.” The number of people who died or went missing due to the heavy rains that hit southern Brazil has exceeded 110. Large farms that led this country to become the world’s largest soybean producer are also suffering heavy losses, rising concerns about rising soybean prices in the international market.

According to local media such as G1 and Oglobu on the 3rd (local time), in the southernmost state of Rio Grande do Sul, the rain continued for five days from the 29th of last month until today, resulting in flood damage in various places, and as of midday that day, 37 people have died, and 74 people have died. It was calculated that the location of the people could not be found.

This is an increase since the previous day, which was 7pm (89 people). Authorities estimated the number of victims to be more than 80,000. The water level of the Guaiba River in Porto Alegre, the capital of the state, reached 4.5m, the highest since 1941.

G1 reported that rivers were flooding in this area as well, flood damage was reported throughout the city, and bus operations were about 95% suspended. Reuters reported that damage to soybean farms was severe, with damage occurring in many places, including bridges collapsing, landslides, and homes being lost.

Brazil is considered a major soybean producer in the world, along with the United States and Argentina.

In recent years, it has ranked first in the world in production, and more than half is exported to China. In Korea, about 80% of total imports of soybean meal (the product left after oil has been extracted from soybeans), which is mainly used for animal feed, comes from Brazil.

Rio Grande do Sul, along with Mato Grosso and Parana, is a representative region with high soybean production not only in Brazil but also in the world.

Leandro Daciuba, head of the region’s agricultural cooperative, told Reuters that heavy rains could lead to a production decline of up to 15 percent in Rio Grande do Sul. The local media said that the damage felt was particularly severe as most farms were about to harvest.

In Brazil, soybeans are sown between October and December and harvested between March and May of the following year.

It seems that the market is already reacting sensitively.

This afternoon, Chicago Mercantile Exchange July, August, and September soybean futures are all up 1.0% higher than the previous trading day.

In the case of July contracts, it rose more than 1.44% at one point. Reuters said Brazilian authorities are likely to revise their soybean harvest forecast figures on the 14th.

/happy news

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