Brazil Facing Worst Dry Spell In 91 Years, Put On Drought Alert

With Brazil facing its worst dry spell in 91 years, the government agencies of the country have issued warnings of droughts in the country this week. That has caused concerns and fears of measures such as energy rationing, hitting hydroelectric power generation and agriculture while also increasing the risks of fires in the jungles of Amazon.

Following the Central and Southern parts of Brazil along the Paraná river basin being hit by a prolonged drought, the Electricity Sector Monitoring Committee (CMSE) of Brazil which is am agency related to the Mines and Energy Ministry of the country, sent an advice to the country’s water regulator ANA to recognize a state of “water scarcity”. This advice was issued by the government agency late on Thursday.

An “emergency drought alert” for June to September was issued for the first time separately by a weather monitoring agency that is relayed to the Agriculture Ministry of the country and said that it is likely that there would be scarce rains during the forecast period in five states in Brazil.

There are significant negative implications for grain cultivation, livestock and electricity generation in the country in the face of a lack of rain across much of Brazil. This is because there is a heavy dependence on hydro electric power generated by water stored in the country’s dams.

On the other hand, scientists fear that there could be severe fires in the Amazon rainforest and Pantanal wetlands because of the dry weather and drought like situations. 

It is important to ease restrictions on some hydroelectric plants so that greater energy is generation or more power storage is done in certain regions because of the lack of rains, said the CMSE. However such measures will require tough negotiations between the politicians of the country, the ANA and the environmental protection agency Ibama.

“Energy rationing is not envisaged, but if there is no relaxing of restrictions, there is no other way,” a government was quoted in a local report as saying.

It is trying to implement measures to expand the supply of energy in Brazil, said the Ministry of Mines and Energy on Friday, but at the same time also ruling out carrying out an emergency process for hiring new capacity.

“The current situation is challenging,” it said in a statement, citing lower than usual reservoirs. “There is no provision for emergency energy contracting,” it added.

Brazil is the largest supplier of expand the supply of energy in Brazil in the world and the drought like situation with very low rainfall has impacted production of both the commodities. That has in turn raised the futures prices for the commodities.

On Friday, future prices for coffee touched a 4-1/2 year high because of worries among traders that the 2022 coffee crop in Minas Gerais could also be affected by the critical soil moisture.

The Mines and Energy Ministry said dry conditions will persist in coming months, particularly in the Southeast and Center West regions

(Adapted from Reuters.com)



Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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