Market Analysis

Last year's record-breaking drought in the Amazon, coupled with lower-than-usual rainfall since, has led to a rapid decline in river water levels. This situation is severely affecting barge navigation, which is crucial for grain exports, and isolating communities that rely on river transport.

The Brazilian Geological Service (SGB) has reported that water levels have been steadily decreasing since June, with all rivers in the Amazon basin expected to fall below their historical averages.

In Manaus, the Rio Negro river's depth has dropped to 21 meters from 24 meters at the same time last year, raising concerns among industries in the Free Trade Zone. Businesses there have requested that dredging operations begin on the river to prevent a repeat of last year's transportation disruptions.

Dredging has commenced at critical points along the Madeira River, where only shallow-draft vessels can currently navigate, according to the government's Department of Transport Infrastructure (DNIT). The DNIT also stated that dredging contracts are being secured for the major Amazon and Solimões rivers.

Last year's drought led to barge traffic being halted at several ports along the Amazon River, and the forecast for this year appears even grimmer, according to consultancy firm ARGUS. The firm’s analysis predicts that grain and fertilizer shipments may need to be redirected to ports in Itaqui and other locations in southern and southeastern Brazil, potentially increasing shipping costs for producers.

In Porto Velho, Rondonia state, the Madeira River has remained below two meters in depth since July, compared to its usual 5.3 meters, as noted by the SGB. The river, which hosts two hydroelectric dams—Jirau and Santo Antonio—serves as a critical transportation route in northern Brazil.

Across the Amazon, communities are increasingly isolated due to reduced river navigability. Residents are struggling to travel for basic necessities, crops are suffering, and fish populations are dwindling as streams dry up, impacting riverside communities dependent on fishing.

"In typical droughts, the rivers maintain enough volume to support food transport and small boats. But this year is different. The rivers have dried up, leaving people isolated," explained climatologist José Marengo.

Rainfall was anticipated in the latter half of this year due to the La Niña phenomenon, which typically cools the Pacific waters near the Equator and brings increased humidity to northern Brazil, along with drier conditions in the south.

However, this year, the Pacific waters have not cooled as expected, compounding the effects of the 2023 drought and creating a dire situation in the Amazon, according to Marengo, who is the coordinator of Research and Development at the National Center for Natural Disaster Monitoring and Alerts (Cemaden).

The ongoing lack of rain in the Amazon will also deprive southern regions of moisture carried by the "flying rivers"—a term Marengo helped popularize, which refers to the invisible currents of humid air that transport water vapor from the rainforest to the savannah and beyond to southern Brazil.

Paraphrasing text from "Reuters" all rights reserved by the original author.