Brazil’s flood-hit state mostly back on track as roads, ports reopen – analyst

SAO PAULO (ICIS)–Most of Brazil’s Rio Grande do Sul state’s infrastructure is back on track so companies can look forward to start their recovery from the historic floods afflicting the state in May, according to an analyst at supply chain consultancy Everstreams.

Jena Santoro said that after the Port of Porto Alegre – the state’s largest city – reopened this week all ports in the state and the main roads and highways have now reopened, although some of the latter only operating at partial capacity as landslides and run-offs caused widespread damage.

However, the situation has sharply improved in the past two weeks, added Santoro.

The petrochemicals hub of Triunfo, near Porto Alegre, restarted operations in mid-May but only at reduced rates as infrastructure at the time was still heavily affected. Polymers major Braskem, the main producer in the area, said at the beginning of June it expected its operations to normalize in the coming days.

Authorities have opened credit lines with favorable interest rates, although trade groups in the state have said more will be needed for the economy to recover.

“Rio Grande do Sul’s port are functioning, although Porto Alegre’s is operating at limited rates. The really bad flooding situation has receded and, in general, we are seeing the situation is a lot more stable than it was even one week ago, or two weeks ago,” said Santoro.

“However, even if the ports are all functioning, they have a large backlog to work through: this is bound to continue having an impact just because it was an event lasting several weeks and causing a great backlog. In terms of roads, highways which had a lot of debris or suffered landslides have now been cleared.”

Many roads, the analyst added, are however only partially open – with one direction functioning, which causes congestion – but they are all gradually reopening, she said.

In general, however, Santoro said Brazil seems to be ill-prepared for which looks to be a large challenge for the country coming up: extreme weather events as its immense geography can make it suffer droughts in the north and floods in the south at the same time, like it happened in 2023.

“We have been monitoring the floods and the droughts in Brazil, which are very important because they can end up recurrently causing disruptions to agriculture and the export of grains, which can have an impact on global exports of agricultural commodities,” she said.

“Indeed, it seems Brazil is set to continue to be hit by these extreme weather events from both ends, events which are set to increase in the future, but the country doesn’t seem to be a particularly prepared for it, one way or the other.”

In another interview with Santoro earlier this week, she said the expected rains in the Gulf of Mexico could greatly contribute to alleviate the severe drought affecting the Altamira petrochemicals hub in Mexico’s state of Tamaulipas.

However, she warned that heavy rains could also cause flooding and, potentially, end up adding more challenges for petrochemicals companies in the area, which are operating at reduced rates or shut operations after authorities limited water supplies to industrial players there.

Interview article by Jonathan Lopez