Amazon drought chokes river traffic, threatens northern corn exports

Low water levels in major inland waterways the Mississippi in the US and the Rhine in Germany have now been added to by a drought in the Amazon. A severe drought has disrupted ship traffic near the region’s biggest city and pushed up costs for northern shipping routes, raising risks for corn exports in coming months.

The federal Brazilian government has already established a humanitarian task force to assist local communities’ access to food and drinking water. However, officials are now warning the thinning rivers could disrupt grains exports in the region. The Agricultural ministry said that “there is concern about shipping part of the corn harvest, which will still take another two to three months”.

The worst effects of the drought have been focused west of Manaus, the capital of Amazonas state, the ministry said. It noted that the lower Amazon and Tapajos River currently remained at decent levels.

But navigation along the Amazon’s upper tributaries, which is often difficult during the dry season, has become especially difficult.

Those rivers are in part a vital stream in the logistical breakthroughs through which Brazil has consolidated northern export routes. That has increased its competitive strength.

On the Madeira River, the government said barge routes between Porto Velho and Itacoatiara, where firms such as Cargill, Bunge and Amaggi operate, “are functional but barge loads are being reduced as a precautionary measure.”

Low river levels have also affected docking of transoceanic ships around Manaus, and have pushed up pilotage costs. Thiago Pera, a logistics research coordinator at ESALQ-LOG, said that Brazil’s bumper soy crop had already sailed, but that conditions could prove problematic for shipping this year’s second corn harvest.

The chief executive of barge operator Hidrovias do Brasil said there was no impact yet on its routes along the Tapajos, where barges typically run at two-thirds capacity in the dry season.

CEO Fabio Schettino said climactic conditions might postpone the rainy season, which often starts in November, by “weeks or a month”. He said that he swathe unusual weather as part of annual variation rather than a “structural change.”

Meteorologist Gilvan Sampaio of Brazilian space agency INPE said that this year’s drought in the Amazon could last throughout 2024 if El Niño intensifies in the Pacific Ocean and there is no cooling of tropical waters in the North Atlantic.

ANEC , an association of major grains exporters in Brazil, who also rely on southern and southeastern ports to export soybeans and corn, said they had not changed their outlook for strong exports this year.