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June 1, 2021

Brazil's Hydroelectric Dams in Midst of Lowest Rainfall in 90 Years

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The Brazilian Ministry of Mines and Energy announced last week that the water levels at the country's hydroelectric dams is precariously low, and action may be needed to reduce electrical consumption.

The Committee to Monitor the Electrical Sector (CMSE) indicated that the rainfall from September 2020 to May of 2021 was the lowest since records started 91 years ago. The hydroelectric dams in the west-central and southeastern parts of Brazil received 63% of their normal rainfall during that period. In northeastern Brazil, the rainfall was just 38% of normal.

CMSE warned that the situation will probably get worse in the Parana River basin, which includes the states of Minas Gerais, Goias, Mato Grosso do Sul, southern Mato Grosso, Sao Paulo, and Parana, since Brazil is entering its annual dry season and no sustained significant precipitation is expected in central Brazil until later in September. This is particularly bad news for the water level on the Parana River at the Port of Rosario in Argentina.

An official for the National Electrical System Operator (ONS) indicated that the situation is very worrisome, but there was no need to panic. He indicated that electrical rationing is not in the immediate future, but numerous government agencies are coordinating their activities to make the electrical grid as flexible as possible to avoid rationing. Brazil generates most of its electricity from hydroelectric and the last time Brazil had to ration electricity was 2001.