Severe flooding in southern Brazil has impacted food storage facilities in low-lying areas and disrupted transportation routes for grain shipments to port, threatening the country’s exports and causing significant economic challenges in Rio Grande do Sul state, a major producer of soy, rice, wheat, and meat, according to a report by Reuters.
The Anec association, representing global grain exporters, reported on Tuesday that access to the port of Rio Grande has been disrupted due to the suspension of a local rail line. The association, which includes major firms like Cargill and Bunge BG.N, also highlighted road blockades forcing grain trucks to take detours of up to 400 kilometers (248.55 miles) to reach the port, resulting in increased freight costs.
This unprecedented climate event submerged entire towns, destroyed critical infrastructure in urban and rural areas, caused livestock deaths, and coincided with the final stages of the corn and soy harvests, casting uncertainty over Brazil’s grain production outlook for 2023/2024.
In response to the crisis, competing meatpackers have collaborated to address logistical challenges brought on by the heavy rainfall. The state’s Civil Defense agency reported disruptions to water and electricity services affecting 1.4 million people.
Meat companies have initiated resource-sharing efforts to expedite the delivery of feed and water supplies to affected chicken and hog farms, where an undisclosed number of animals perished due to the floods.
Paulo Pires, president of Rio Grande do Sul’s farm lobby Fecoagro, stated that assessing the extent of grain production losses from flooded silos along river areas remains challenging due to their significant size.
Gedeao Pereira, president of the agriculture lobby Farsul, acknowledged isolated cases of flooded food silos but expressed optimism that they could dry in time to minimize losses. Pereira emphasized concerns about soy crops awaiting harvest, particularly in central and southern Rio Grande do Sul.
Earlier statements from the state’s port authority indicated that Rio Grande port operations were normal, with terminals unaffected by rising water levels in the Laguna dos Patos lagoon.
However, Cargonave, a shipping agency, confirmed slower grain arrivals at Rio Grande port, which exported 10.4 million tons of soybeans and 3.6 million tons of soymeal last year. The agency cited logistical challenges caused by the recent flooding as a contributing factor to the slowdown in grain shipments.
