Soybean, chicken and pork production facilities destroyed in floods in Brazil
Production is expected to fall by more than 15%… Soybean futures prices are rising
As large-scale flooding has continued in Brazil since the end of last month, leading to deaths and disappearances, Brazil’s agricultural industry has also been hit hard, causing global agricultural prices to fluctuate. Temporary supply shortages are expected as livestock production facilities not only for rice and beans but also poultry and pork are closed. Citizens are carrying out rescue operations in the southern Brazilian state of Rio Grande do Sul, where flooding occurred on the 6th (local time). The state of Rio Grande do Sul Brazil said on the 6th (local time) that the flood Killed at least 83 people and 276 were injured. The number of casualties is expected to increase gradually.
Accordingly, there is an analysis that this flood could also affect international soybean prices. Brazil is one of the largest soybean producers in the world, and Rio Grande do Sul in particular is the third largest soybean producer in Brazil. As of 9:50 pm central time on July 6, soybean futures on the Chicago Board of Trade (CBOT) were trading at $1,246 per 5,000 bushels, showing an increase of 7.13% this month alone. Soybean futures price trend in July (Photo = CME) Concerns about declining local production continued. According to Reuters, an official from the local agricultural cooperative Cotrisal said, “Due to the heavy rains on Friday (3rd), which flooded the entire city and farms, soybean production in the state could drop by up to 15%,” adding, “Soybean production scheduled to be harvested may decrease by up to 15%.” “About 30 to 40 percent of the soybeans would be damaged, and in areas where the damage was extreme, 70 to 80 percent of the soybeans would be damaged,” he predicted.
Before the flood, Brazilian state agencies estimated soybean production in Rio Grande do Sul at about 22 million tons. But after the flood, experts revised their forecasts to say that production would fall below 20 million tonnes.
“The market will soon learn that the Brazilian soybean harvest is far from the 155 million tons estimated by the US Department of Agriculture,” said Fernando Murano, an analyst at the Brazilian consulting firm Agrural “It needs to be lowered, ” he told Reuters. Photo = Hankyung DB The same goes for livestock farming. According to Bloomberg News and the Brazilian Animal Protein Association (ABPA), 10 meat packing plants in the state have suspended operations, and BRF SA, Brazil’s largest poultry producer, said in a statement on the 6th, “The majority of the state’s chicken and pork production is “Due to the temporary factory shutdown, it may take 30 days or more for production systems to be restored.” He warned of product shortages.
Recently, Brazil has suffered a lot of damage due to record breaking rains, floods, landslides and resulting severe drought. In the last year, four major floods have occurred in Brazil alone. Experts say that it is very likely that climate change is causing this phenomenon. Brazilian President Luiz Inácio Lula Dasiouba blamed the disaster on “the failure of the global community to respond properly to climate change.” President Lula said, “Poor countries that emit almost no greenhouse gases suffer from the pollution of rich countries.”
Reporter Han Kyung-kyung
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