The drought lasts for 180 days! Fire losses in Brazil exceed 2 billion yuan! Coffee industry is not optimistic

According to local media reports, drought and fire conditions in Brazil have not been well controlled and have worsened in recent days after the beginning of September in Brazil. According to reports, the drought in Minas Gerais state in southeastern Brazil is very serious. Many cities in the state have not had any rain in the past period of time, and the record city has not rained for 158 days. The well-known Bomudesparco Falls has dried up.

Earlier, it was reported that a serious fire broke out in the Brazilian state of Sao Paulo at the end of August, with 46 cities entering a 180-day state of emergency. By early September, it was reported that the fire had been brought under control, but recently it was again reported that 12 cities had been hit by the fire again and were still not fully under control, which had dealt a heavy blow to the local economy as the fire continued.

According to the director of the Sao Paulo State Department of Agriculture, agriculture is a priority in Sao Paulo State, as the fire is mainly concentrated in sugar cane plantations, coffee plantations and farms, and secondary hazards such as smoke from the fire affect subsequent agricultural production, it is currently estimated to cause a loss of about 2 billion reais.

And, at present, many parts of Sao Paulo state are shrouded in smoke, the air quality is very bad, can be seen very low, affecting the daily travel of residents and part of the transport industry, and a serious threat to the lives of local residents. According to the Brazilian Meteorological Agency, there will be a cold air coming in the near future, but because Brazil is still in a very hot and dry state, and there are a large number of pollutants suspended in the air, as a result, there will be "black rain" in five states, namely, Rio Grande do Sul, Santa Catarina, Parana, Sao Paulo and Mato Grosso Sul.

"Black rain" refers to a kind of rainfall phenomenon. Sometimes, the color of Rain Water does not necessarily appear black, and it can not be seen on the surface, but the content of harmful pollutants in Rain Water is extremely high. It usually occurs near industrial areas, fires, or where fossil fuels are burned in large quantities. When the "black rain" falls on the ground, it will have an impact on the quality of underground water sources and vegetation in nearby areas, and can cause the surface of some buildings, vehicles and infrastructure to be corroded.

According to the latest report, the fire also spread to southeastern Brazil, with the environment department of the state of Rio de Janeiro in Brazil reporting that as of early September, there had been more than 16500 fires in the state of Rio de Janeiro this year, more than 95 per cent year-on-year. Between Sept. 13 and Sept. 14, there were 330 new fires in the state of Rio de Janeiro, and more than 1000 firefighters are now involved in fighting the fires, but the fires still destroyed a lot of forests. As a result, all ecological parks in the state are temporarily closed to avoid causing more serious losses.

Moreover, due to the serious drought in Brazil, the Brazilian National Climate Institute pointed out in its report that due to the falling water level of many major rivers, frequent wildfires and serious environmental pollution, about 3978 cities in Brazil are currently facing varying degrees of drought. Among them, 201 cities are in a state of extreme drought, and the degree of dryness in this state is even close to that of the Sahara Desert in Africa. Coupled with the arrival of "black rain" to pollute underground water sources and vegetation, the drought situation in the future may be even more serious. This has a serious impact on many industries, such as Brazil's agricultural industry.

Therefore, in a recent letter to the European Union, the Brazilian government expressed the hope that the European Union would abolish the No deforestation Act (EUDR), which was implemented at the end of 2024, all because it could affect 1/3 of Brazil's exports to the European Union. According to the bill, it will be used in soybeans, beef, coffee, cocoa, wood and other products, which are the main products supplied by Brazil to the European Union.

According to figures from Brazil's Ministry of Development, Industry and Foreign Trade, Brazilian exports to these products reached US $46.3 billion in 2023, while government statistics show that EUDR is likely to affect exports of around US $15 billion, which could be even greater given the current situation in Brazil. Therefore, once the bill is formally implemented, it will reduce its agricultural quota. In addition, a number of countries and a number of world-renowned buyers have written to the European Commission earlier, hoping to postpone the implementation of the new EU deforestation regulations, but to no avail.

At present, international coffee prices are rising. Apart from the production cuts reported by many countries such as Brazil, Vietnam and Indonesia, many EU traders are worried that the implementation of EUDR at the end of the year will affect future imports, so they will increase their purchases at the end of the year in order to have sufficient stocks.

As a result, people in the Brazilian coffee industry are very worried about the state of the coffee industry next year, as it is now in the flowering season of the new coffee production season, and problems such as fire, drought, water shortage and pollution of groundwater resources may greatly reduce output and quality. And next year, the formal implementation of EUDR will reduce exports, which is not conducive to the development of the industry as a whole.

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