Brazil's coffee producing areas may be in danger of continuous drought and output on the eve of drivers' strike transport supply chain chaos

Persistent drought in Brazil

The arrival of September means there is not much time left for Brazilian coffee plants to recover. Brazil experienced the worst drought in 91 years this year, followed by the worst snow in 62 years. The originally fruitful coffee plants passed away in batches after the extraordinary days of ice and fire in 2021.

It had been hoped that Rain Water, brought by Brazilian spring in September, would nourish the scarred land. Brazil, the country with the world's largest freshwater resources, has lost 15 per cent of its surface water since 1991, according to an article published by VOA on September 6th. Pantanal wetland is the largest warm climate wetland in the world. Today, the water coverage of the Pantanal is only 25% of what it was 30 years ago.

Yahoo Finance reported on September 2 that Brazil's minister of mining and energy pleaded with people to reduce energy consumption because of the hydropower crisis caused by drought. Annual rainfall in Brazil has been decreasing over the past decade and droughts have become more frequent. The Panara river, which connects Brazil, Argentina, Paraguay and Uruguay, is at its lowest level in 77 years, creating difficulties for hydropower and hampering the transport of goods.

Today, the flowering of coffee plants is just around the corner, but the rainfall is not as good as expected. Not only agriculture but also the hydropower and transportation industries are affected.

Troubles in the transport chain

According to the Coffee Finance Network on September 7, local media in Brazil said that a nationwide truck drivers strike is expected to break out on September 7. Truck drivers in the country will demonstrate in an organized manner in the capital. According to the initial description of the organization of the strike, the current strike lasts only one day.

Campaign leaders said that fortunately the strike was not widely supported and that if the strike continued, it would have a huge impact on the delivery of coffee to the port.

In addition, the global economic outlook continues to be uncertain, and supply chain chaos is at the core of this uncertainty. According to an article in the New York Times on Aug. 31, a 40-inch container from Shanghai to Michigan cost $6000 to $7000 before the COVID-19 epidemic; now it costs at least $26000 to start in mid-September 2021.

In addition, even if they are willing to spend money to order containers, they still have to face the problem of container shortage. A COVID-19 positive case was found near Zhoushan Port in Ningbo, the world's third largest container port, leading to the closure of the terminal and further disrupting the global supply chain.

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