The La Nina may, officially, be over. But it is not going easily.
Officials in Brazil - for which the weather phenomenon often brings dry conditions, especially in southern areas – have declared an “emergency drought alert” for June to September, saying rains are likely to remain scarce in the Parana river basin.
This includes Minas Gerais, the top coffee-growing state, São Paulo, the biggest sugar cane grower, and Parana, big in safrinha corn.
And while the top safrinha corn producing state, Mato Grosso, was not included in the alert, it is not escaping drought in Brazil, which is reportedly facing overall its worst dry spell in 91 years.
Mato Grosso research institute Imea, citing a lack of moisture, has cut its forecast for the state’s corn output by 2.6m tonnes to a three-year low.
Not that the impact of the latest concern is being reflected evenly across markets. While arabica coffee futures on Tuesday set a fresh four-year high, sugar has shown less impressive gains, while the corn market appears to have shrugged off the announcement.
Why? In part this reflects crop cycles, with arabica’s 2022 crop somewhat at stake too, and in part geography, with corn investors more focused on the US Midwest. For the full analysis of what ag news means, rely on Agrimoney.
Agrimoney Editor in Chief
« Back to index