Floods cost Brazil billions of dollars in economic losses

Brazil’s robust agricultural sector has suffered damage from floods and heavy rains that have ravaged the south of the country, with a number of industries, from automobiles to banking and insurance, also bracing for further disruption.

The heavy rains that struck the state of Rio Grande do Sul, located in the far south of Brazil, flooded entire cities with water and closed its main airport indefinitely. More than 400 municipalities and 1.5 million people were affected, according to the latest government data. The floods displaced about 164,000 residents, and claimed the lives of 100 people as a result of the rains that began on April 28.

Preliminary estimates from Enki Research indicate economic damage costing no less than $2.5 billion in the state. This initial number is expected to increase, based on research models and satellite data, as water levels remain high and the region is expected to see more storms in the coming days.

The first effects have already been seen in agriculture, where the price of soybeans has risen amid fears of a “decline in yield and deterioration in quality,” according to a report by XP Inc. President Luiz Inacio Lula da Silva said on Tuesday that the country may have to import rice and beans, as Rio Grande do Sul provides about 60% of the country’s rice production, which is a staple in the diet. XP said meat production may also be affected because the state is responsible for about 17% of the country’s pork production, and 13% of poultry. (Bloomberg)