Brazil is experiencing its worst drought in decades, and agricultural product prices may fluctuate

On August 26, Brazil's National Natural Disaster Warning and Monitoring Center released a report stating that more than half of the country is experiencing the most severe drought in 44 years. Among the 27 federal units, 16 states and the Federal District of Brasilia are affected, and the drought has lasted for 12 months.

From May to August this year, temperatures in various parts of Brazil hit record highs for the same period in history. The scarcity of rainfall has left rivers and most river basins in a drought state and also led to frequent fires in various places.

The severe drought has brought many challenges to Brazil. In terms of agriculture, Brazil is a major exporter of agricultural products. The drought affects the production of crops such as sugar cane and corn, and may lead to fluctuations in global prices of related agricultural products. Hydropower accounts for a large proportion of Brazil's total power generation. The drought has reduced hydropower generation, forcing the country to rely more on expensive thermal power plants. Electricity prices have risen, further pushing up inflation. In addition, river shipping is blocked due to drought, and commodity transportation costs have increased.

Facing the drought, the Brazilian government is taking measures to deal with it. For example, it is considering launching government option contracts to encourage the planting of corn, etc. However, the drought situation is still severe, and its future development and response measures are attracting much attention.