Heavy rainfall beginning the final week of April has caused widespread flooding and landslides across Brazil’s southern state of Rio Grande do Sul. By May 3, water levels on the Guaiba River reached 4.96 meters (16 feet), the highest water levels recorded since 1941. In total, at least 345 municipalities across the state are affected. Around 121,000 residents have been displaced and more than 80 deaths have been confirmed by authorities so far.
Infrastructure damage will persist
The flooding has cut off dozens of highways across Rio Grande do Sul, slowed down operations at regional sea and airports, and caused widespread power outages, affecting hundreds of thousands of customers. While authorities are working on restoring power, the severe weather conditions damaged three substations, 25 transmission lines, five hydroelectric plants, and 11 power transformer lines, likely resulting in prolonged outages in some areas, even if the weather conditions improve.
A range of manufacturers in the state have already confirmed disruptions to their production and transportation processes, including companies operating in the automotive, food, steel, and petrochemical sectors. Impacts are also likely in the agricultural sector, particularly on the state’s soybean production. With rainfall expected to persist in the coming days, those doing business in the state of Rio Grande do Sul should prepare for persistent flood-related business and transportation disruptions in the near future.
Widespread logistics disruptions
The widespread flooding across Rio Grande do Sul resulted in Brazil’s President Luiz Inacio Lula da Silva declaring a state of public calamity in 336 municipalities on May 6. As of May 3, flooding and subsequent landslides blocked at least 154 sections along 68 of the state’s highways, severely disrupting road transport in many parts of the region. Salgado Filho Porto Alegre International Airport in Porto Alegre had to suspend flight operations until further notice amid heavy rainfall. Flight operations will remain suspended until further notice due to security concerns.
The Port of Porto Alegre, an inland port located in the state’s capital, was forced to halt operations, and is expected to remain closed for around 30 days. Cargo bound for Porto Alegre will be diverted to the nearby Port of Rio Grande, with around 50,000-70,000 tons of cargo expected to be rerouted.
Operations have mostly continued at the Port of Rio Grande, one of the country’s major seaports, but inclement weather conditions have slowed down cargo handling. With additional cargo coming into the port from Porto Alegre on top of slowed handling operations, congestion and processing delays at the Port of Rio Grande are possible in the coming weeks.
Growing number of companies report disruptions due to floods
The southern state of Rio Grande do Sul is home to companies operating in a range of industries, including general machinery and materials processing, chemicals, food making, and agriculture. So far, operational disruptions have been confirmed by companies in the food and beverage making, poultry, chemicals, and automotive sectors.
As localized flooding and power outages persist in many parts of the state, operational disruptions at many manufacturers based in Rio Grande do Sul are likely to continue until the weather situation improves and recovery efforts can be completed.
Rio Grande do Sul accounts for approximately 14% of total soybean production in Brazil, which is the largest soybean producing country in the world. Currently, 25% of the soybeans in the state are still unharvested. This portion of the crop is now at risk of wetness and flooding issues, including potential crop losses and lower quality. A growing number of companies operating in the state’s poultry sector also confirmed business and transportation disruptions due to the ongoing flooding. Rio Grande do Sul is one of Brazil’s key chicken export regions, accounting for the third highest total of chicken exports, with just Paraná and Santa Catarina exporting more chicken products in 2023.
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