Brazil is going through the worst drought in the last century, directly impacting agricultural commodities’ production.
The impact occurs on the Coffee, Sugarcane, Corn, Soybean and Wheat harvests. In addition, the increase in the cost of electricity overloads the production costs in the processing of products in the mills.
This week, the main Brazilian sugar and grain-producing regions suffered a major frost to make matters worse.
Drought and strong frost have also impacted the second crop harvest of yellow corn and GMO soybeans.
The announcement that many regions with sugarcane plantations were affected by frost in the early morning hours of last Wednesday put pressure on sugar futures markets, which closed higher on many international exchanges. The climatic phenomenon, accompanied by a large mass of cold air, would have affected regions in the north and south of São Paulo, the main sugarcane producer in the country.
Agricultural commodity prices are forecast to become exorbitant in the second half of 2021.
Source: Mello Commodity