Record Droughts Plague Latin America

The country is facing its worst drought in 91 years. The National Meteorological Institute warned in May that the central and southern states of Goiás, Mato Grosso do Sul, Minas Gerais, Paraná, and São Paulo are likely to face severe water shortages through September. The states worst affected are home to the Paraná River basin, an important means of transportation for the region, and the Pantanal, the world’s largest tropical wetland.

Already this year, Mato Grosso do Sul and São Paulo reported their lowest levels of rainfall in 20 years during the November-to-March rainy season. The decline led São Paulo’s Cantareira reservoir system—currently supplying water to nearly 7.5 million people—to drop below 10 percent capacity.

The country’s extensive national hydroelectric power system cannot fulfill current energy demands with its low reservoir levels, which are currently at 35 percent capacity. Hydropower plants supply 70 percent of the country’s total electricity, and as the plants run dry, the government is filling the gaps with thermoelectricity by allowing producers to sell electricity without a contract for six months beginning in June. There’s a catch, though: thermoelectricity is three times more expensive than hydroelectricity.

The drought puts farmers at risk, threatening yields to drop by 20 percent. As deforestation-fueled forest fires destroy crops, farmers cut down more trees to create additional farmland to compensate for the declines. Brazil’s National Institute for Space Research reported that deforestation in May increased 67 percent in the country, compared to the same month a year prior. The cycle of deforestation, along with the effects of La Niña, turns the Amazon from wonder of the world into kindling waiting to catch fire.

The problems presented by the crisis in Brazil, as well as La Niña weather pattern, float down to Argentina and Paraguay through the Paraná River basin, with the Paraná River and Paraguay River sitting at unusually low levels.

Argentina, the world’s top soybean exporter, saw its harvest of that crop drop by 10 percent, the second-lowest level of the past five years. In northern parts of the country, rainfall was half of what was recorded in the past three August-to-February cycles. In March pre-harvest forecasts, the Rosario Board of Trade predicted that a production decline of 9.2 percent would translate to a $1.3 billion loss. Argentine corn crops showed promise, but the country still is looking for alternatives, including testing drought-resistant, genetically modified varieties.

The drought also turned logistical operations upside down. The Paraná River, on average, is 10 feet lower than typical levels. Low river levels make it more likely that boats get stuck, leading to cost overruns across multiple sectors. Many businesses turned to land transportation, bolstering demand for diesel across the region.

In landlocked Paraguay, 85 percent of foreign trade is conducted via the eponymous river. In Argentina, 80 percent of its crop harvests travel through rivers. For both countries, trade grinds to a halt without functioning rivers. By October 2020, Paraguay’s water transportation sector had already lost $250 million to drought. In April, Paraguay asked Brazil to release water from its already low-capacity Itaipu Dam in order to prevent more barges from getting stuck, but Brazil declined.

About 70 percent of Mexico’s territory was experiencing drought as of July 2, up from about half the country in December 2020. The drought is categorized as extreme in about 20 percent of the country, mostly in the north and west. But it is also imperiling urban areas like Mexico City, where water shortages were already common and the mayor has declared the worst drought in 30 years.

What’s causing the drought? It’s partially a result of Mexico’s dry season, which normally runs from December to April, but was exacerbated by reduced precipitation during 2020’s La Niña, which coincided with Mexico’s summer typically wet season. From October to April, there was 20 percent less rainfall than usual and higher-than-average temperatures. On top of that, there has been an uptick in the domestic demand for water due to more people quarantining at home.

The drought has further depleted Mexico’s already fragile water supply. According to Mexico’s water agency, 68 percent of the 210 dams it monitors are below 50 percent capacity. Even worse, 78 dams are below 25 percent capacity—almost double the number that were just one year ago.

The water scarcity has put pressure on the bilateral relationship between the Mexico and the United States, which is also experiencing drought conditions in the southwest and west regions. The 1944 Rio Grande Treaty provides each country with an obligation to provide its neighbor with water, however, Mexico has struggled to fulfill its quota due to its drought and, in the fall of 2020, the country was forced to divert water from its own citizens to adhere to the treaty.

The drought is affecting the entire Mexican economy, especially in water-intensive sectors like livestock and agriculture. In Sonora and Chihuahua, cattle inventories are down 40 percent, as farmers sell off livestock prematurely to reduce expenses, even as prices for livestock are down 20 percent. And in Sinaloa, white corn production is estimated to have dropped by 13 percent. Mexico has had to increase its importation of crops to meet food demand. In the first half of 2021, the country imported 50 percent more white corn and 15 percent more yellow corn than the year before. The drought’s effects are also contributing to inflation, per the Central Bank.

Mexico’s wet season runs from June to September, and there is hope that this will help alleviate the drought. Already, parts of the country are receiving significant rain. Still, experts worry that this might not be enough. For its part, the Mexican government plans to seed clouds with silver iodide in Chihuahua, Sinaloa, and Sonora in an effort to induce rainfall.