El Niño raises risks for Brazil grain producers and logistics firms

The potential impact of El Niño on Brazil’s 2026/27 grain crop could affect companies across the agricultural supply chain, either directly or indirectly.

Analysts interviewed by Valor said the risks are greater for commodity producers such as SLC Agrícola, but warning signs are also emerging for logistics operators involved in moving crops to export corridors, including Hidrovias do Brasil and Rumo.

“Within our coverage universe, SLC would be the most affected,” said Guilherme Palhares, an analyst at Santander. “Its land portfolio is highly concentrated between Mato Grosso and Matopiba,” he added, referring to the agricultural frontier spanning parts of Maranhão, Tocantins, Piauí and Bahia. “Those regions have historically been exposed to El Niño events.”

Contacted by the report, SLC said it is closely monitoring the possibility of a stronger El Niño during the crop season, but believes it is still too early to estimate effects on yields or results. The company said the impact will depend on the intensity of the phenomenon, rainfall distribution and when the effects occur.

“The company acts preventively, with farm-by-farm and crop-by-crop analysis, adjusting management practices, input use and resource allocation as the scenario evolves,” SLC said in a statement.

For soybeans, the leading product in Brazil’s agricultural export basket, shipment data help gauge how exposed the logistics chain is to potential shifts in the pace of the harvest. The soybean series available on DataLiner, covering January 2023 through June 2026, shows that dynamic clearly. The peak for the period came in March 2025, when 14.8 million metric tons were shipped. In 2026, the highest monthly volume through June was also recorded in March, at 14.4 million metric tons. In the January-June period, however, soybean shipments were 1.5% below the same period in 2025.

Brazilian Soybean Exports | Jan 2023 – Jun 2026 | WTMT

Source: DataLiner (click here to request a demo)

Logistics exposure

In logistics, Citi analyst Filipe Nielsen said the risk for Hidrovias do Brasil shares is high “because of its lack of revenue diversification, which is concentrated in a small number of clients, combined with exposure to climate events that are difficult to predict.”

According to the bank, droughts can affect harvests and/or reduce river levels, hurting barge navigation conditions.

A source familiar with the matter said Hidrovias do Brasil monitors river levels, adjusts barge convoy configurations and coordinates logistics with clients in advance in Brazil’s Northern Arc export corridor. Contacted by the report, the company declined to comment.

One concern for companies that move agricultural cargo along rivers in northern Brazil is that lower water levels, caused by reduced rainfall, could affect navigability. For that reason, they support maintenance dredging on the Tapajós River, which depends on federal government authorization.

According to Ronei Glanzmann, CEO of MoveInfra — which represents Rumo, Santos Brasil, Ultracargo, Hidrovias do Brasil, Motiva and Ecorodovias — up to 5 million metric tons of grain may not be transported through the Tapajós waterway if maintenance dredging is not carried out.

“We are requesting a meeting with the president’s office to explain this. From September onward, we would no longer be able to use the dredges to carry out the process,” said Jesualdo Silva, CEO of Brazil’s port terminals association ABTP.

Government says dredging will not happen for now

Brazil’s Chief of Staff’s Office told Valor in a statement that, after reviewing available technical information, consulting the agencies involved and hearing Indigenous peoples and traditional communities in the region, the federal government decided not to carry out dredging on the Tapajós River at this time.

The affected stretch lies between Itaituba and Santarém, in Pará state.

“Assessments carried out so far indicate that local navigation can be maintained even in a scenario of lower water levels, ensuring supply to riverside communities,” the Chief of Staff’s Office said.

For larger cargo flows, the government said there is regular road transport available and contingency plans include interventions on highways if truck traffic increases.

MoveInfra estimates that if volumes normally transported on the Tapajós River have to be moved by road, additional freight costs for the sector could reach R$850 million.

Nielsen, from Citi, also noted that weather can influence crop volumes and, as a result, demand for rail transport by Rumo. Contacted by the report, the company declined to comment.

Source: Globo Rural

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