Unprecedented flooding in the southern Brazilian state of Rio Grande do Sul could take a hefty toll on country’s total expected 2023-24 soybean production, says a new report from the USDA’s Foreign Agricultural Service (FAS).
Released Thursday, the report – which is based on estimates from the Association of Technical and Rural Extension Enterprises of Rio Grande do Sul (EMATER/RS) - said the afflicted state was poised to harvest a total soybean crop of 22.3 million tonnes, a new record high.
But with the harvest only about three-quarters complete by the time the floods hit in late April, that left approximately 5.3 million tonnes of crop still out in the field, representing over 20% of EMATER/RS’s output estimate for Rio Grande do Sul and up to 4% of Brazil’s forecasted national soybean production.
Perhaps not all that production potential will be written off, but the report said market analysts agree that an ‘important share’ of the Rio Grande do Sul’s expected soybean output will be lost, with current projections ranging from 750,000 to 2.8 million tonnes.
That potential loss is significant, given that overall Brazilian soybean production estimates have already been slipping.
Conab, the Brazilian equivalent of the USDA, is currently estimating the 2023-24 Brazil soybean crop at 146.5 million tonnes, 10% below the agency’s initial forecast of 162 million, mainly due to earlier hot, dry conditions in the country’s centre-west region. (The USDA’s May forecast is 154 million). Any flood-related losses from Rio Grande do Sul will further dent total production potential, the USDA FAS report said, although it admitted a more accurate assessment of damage will only be possible in the coming weeks as the weather improves, and floodwaters recede.
“Accurate estimates of losses will directly affect domestic and international prices as concerns with Brazil’s supply grow,” the USDA FAS report said.
According to Brazil’s National Water and Sanitation Agency (ANA) and National Institute of Meteorology (INMET), the Rio Grande do Sul state capital, Porto Alegre, registered 327.4 millimeters of rainfall in almost one week (April 28th – May 5th). However, several other regions had precipitation levels at nearly 800 millimeters, eight times higher than the historical average (1991-2020), at 113 millimeters.
