Brazil in recession as drought, inflation and interest rates bite

By Marcela Ayres and Camila Moreira

BRASILIA (Reuters) -Brazil’s economy contracted slightly in the three months to September, government data showed on Thursday, as surging inflation, steep interest rate hikes and a severe drought triggered a recession in Latin America’s largest economy.

The 0.1% decline in Brazil’s gross domestic product (GDP) in the third quarter, reported by official statistics agency IBGE, was below a median forecast for zero growth in a Reuters poll.

Brazil’s economic rebound from the worst of the COVID-19 pandemic has sputtered as inflation surged into double digits, forcing the central bank to raise borrowing costs aggressively despite the downturn.

Economists have said that the stubbornly high levels of inflation in Brazil have steadily eroded consumers’ purchasing power, proving a drag on the economy.

Some analysts said Thursday’s weak data may discourage the bank’s monetary policy committee, called Copom, from an even larger interest rate increase at its December meeting.

“Against this backdrop, we no longer see Copom upping the pace of monetary tightening next week,” William Jackson, chief emerging markets economist at Capital Economics, told clients in a note, forecasting another rate increase of 150 basis points.

Big rate hikes from the central bank, whose autonomy was written into Brazil’s constitution this year, are one more headwind for a weak economy, which is weighing on President Jair Bolsonaro’s popularity as he prepares to seek reelection in 2022.

Revised data showed a 0.4% drop in the second quarter, worse than the 0.1% decline reported previously. Two straight quarters of contraction meet the definition of a recession.

Unusually dry weather this year has also hurt key Brazilian crops such as corn and coffee. Vanishing reserves at hydropower dams drove up electricity costs, adding to price shocks.

Agricultural production fell 8.0% in the third quarter, while industrial output was flat and services advanced 1.1%.

Brazil’s auto industry has struggled to ramp up production amid a shortage of components such as microchips in global supply chains. Shortages have also hurt manufacturing in Mexico, whose economy contracted more than expected in the quarter.

WORSE TO COME

Some economists are warning of a deeper downturn next year.

The market outlook for 2022 economic growth has fallen from 2.3% in June to less than 0.6% in the latest central bank poll of economists, released on Monday.

Brazil’s Economy Ministry dismissed that consensus in a statement on Thursday, reaffirming its forecast of economic growth above 2% next year and pointing to recent job creation data as evidence of a resilient recovery.

Brazil’s unemployment rate fell to 12.6% in the third quarter from 14.2% in the prior quarter, data showed this week, hitting the lowest point since the beginning of the pandemic.

“The government has an obvious bias to overestimate (growth) as long as possible. But there comes a point when you can’t,” said José Francisco Gonçalves, chief economist at Banco Fator.

Compared to the third quarter of 2020, Brazil’s economy grew 4.0%, IBGE data showed, below a median forecast of 4.2% growth.

(Reporting by Marcela Ayres in Brasilia and Camila Moreira in Sao Paulo; Writing by Brad Haynes; Editing by Bernadette Baum, Daniel Flynn and Richard Chang)

 

NOAA expects U.S. Southwest drought to continue or worsen this winter

By Karl Plume

(Reuters) – A harsh drought is expected to continue or worsen across parts of the U.S. West and northern Plains this winter, including in central and southern California, according to the National Oceanic and Atmospheric Administration’s (NOAA) winter outlook.

NOAA, however, expects the drought to lessen in the U.S. Pacific Northwest and northern California amid an emerging La Nina phenomenon, NOAA’s Climate Prediction Center said on Thursday.

A drought spanning much of western North America has damaged crops from apples to wheat, and has cooked cattle grazing pastures, weakened bee colonies and fueled concerns about rising food prices.

Nearly the entire U.S. West is in some level of drought, according to the National Drought Mitigation Center, with almost half of major agricultural state California under exceptional drought, the most severe category.

“A major region of concern this winter remains the Southwest, where drought conditions remain persistent in most areas,” said Jon Gottschalck, chief of the Operational Prediction Branch of NOAA’s Climate Prediction Center.

“The Pacific Northwest, northern California, the upper Midwest and Hawaii are likely to experience drought improvement,” he said during a webinar highlighting NOAA’s December-to-February outlook.

The conditions are expected to be fueled by an emerging La Nina pattern and its colder-than-normal Pacific Ocean surface water temperatures for a second straight winter.

(Reporting by Karl Plume in Chicago; Editing by David Gregorio)

Late monsoon floods kill more than 150 in India and Nepal

NEW DELHI (Reuters) -More than 150 people have died in flooding across India and Nepal in recent days, as heavy late monsoon rains triggered flash floods, destroyed homes, crops and infrastructure and left thousands stranded.

The north Indian state of Uttarakhand has been especially badly hit, with 48 confirmed deaths, SA Murugesan, secretary of the state’s disaster management department, told Reuters.

In Nainital, a popular tourist destination in the Himalayan state, the town’s main lake broke its banks, submerging the main thoroughfare and damaging bridges and rail tracks.

In nearby Chamoli district, rescuers from India’s paramilitary National Disaster Response Force continued to search debris following landslides caused by the heavy rains.

India’s federal interior minister Amit Shah surveyed badly hit areas on Thursday.

“Crops and homes have been wiped out, which is a severe blow to families already grappling with the devastating fallout of the COVID-19 pandemic,” said Azmat Ulla, a senior official at the International Federation of Red Crescent Societies.

“The people of Nepal and India are sandwiched between the pandemic and worsening climate disasters, heavily impacting millions of lives and livelihoods.”

Some 42 people have died in the last week in the southern Indian state of Kerala, according to a statement from the chief minister’s office.

In neighboring Nepal, at least 77 people have died.

India’s annual monsoon rains usually run from June to September.

(Reporting by Saurabh Sharma in Lucknow and Jose Devasia in Kochi, Writing by Alasdair Pal; Editing by Simon Cameron-Moore and Nick Macfie)

Chemical signal for locust swarming identified in step toward curbing plagues

By Will Dunham

WASHINGTON (Reuters) – Scientists have identified a chemical compound released by locusts that causes them to swarm, opening the door to possible new ways to prevent these insects from devouring crops vital to human sustenance as they have for millennia.

Researchers said on Wednesday they identified the pheromone – a chemical produced by an animal that affects the behavior of others of its own species – in the world’s most widespread locust species, the migratory locust, or Locusta migratoria.

Called 4-vinylanisole (4VA), it is primarily released from the hind legs and is detected by the antennae of other locusts and sensed by odorant receptors, the researchers said.

4VA powerfully attracted locusts regardless of age or sex, the research published in the journal Nature showed. Its production was triggered in the insects when as few as four to five solitary locusts came together, precipitating swarming behavior.

“In human history, locust plagues, drought and flood were considered as three major natural disasters which caused serious agricultural and economic losses all over the world,” said research leader Le Kang, a professor of entomology and ecology at the Chinese Academy of Sciences’ Institute of Zoology.

“As the most widely distributed and one of the most dangerous locust species, the migratory locust represents a serious threat to agriculture worldwide,” Kang added.

Swarms can include billions of locusts and span hundreds of square miles (km) as the insects voraciously consume crops, imperiling food security. Migratory locusts inhabit Asia, Africa, Australia and New Zealand, attacking pastures and critical crops such as wheat, rice, corn, millet, barley, oats, sugarcane and sorghum.

Kang said further research is needed on whether 4VA exists in other locust species such as the desert locust, called Schistocerca gregaria, that currently is ravaging parts of Africa and the Middle East.

The chemical insecticides currently used to suppress locust outbreaks raise concerns about human health and safety. The identification of 4VA could inspire new methods.

A chemical could be developed to block 4VA’s effects to prevent swarming, Kang said, or a synthetic version could lure locusts into traps to be killed. Locusts genetically modified not to respond to 4VA could be developed and released to establish wild non-swarming populations, “subject to biosecurity evaluation,” Kang added.

(Reporting by Will Dunham; Editing by Sandra Maler)

India steps up efforts to curb locust infestation

By Mayank Bhardwaj

NEW DELHI (Reuters) – Battling its worst desert locust outbreak in decades, India is ordering new equipment to control the swarms before summer crop-sowing gathers pace in the middle of this month.

India has brought the locusts under control at 399 locations in five states and has placed an order to buy 60 new insecticide spraying machines, two government sources said.

Authorities have used specialist vehicles and fire engines to spray insecticides in an area of 55,542 hectares in the western states of Gujarat, Rajasthan and Maharashtra, central state of Madhya Pradesh and Punjab, and Haryana and Uttar Pradesh in the north.

The government also plans to buy five helicopter-mounted spray systems to curb the fast-spreading swarms by mid-June when monsoon rains help farmers boost rice, cane, corn, cotton and soybean sowing, according to the sources, who are directly involved in formulating plans to tackle the scourge.

Nearly half of the 60 insecticide spraying machines will arrive this week, they said.

India needs to stop the infestation from spreading further to ensure the swarms do not devour summer crops.

“We’ve been rather lucky that we’ve got a week or two to get our acts together and stop locusts before summer sowing gathers momentum,” said Bhagirath Choudhary, director of the South Asia Biotech Centre, a non-profit scientific society.

The locust infestation has not caused significant damage so far due to the lean season – the gap between the previous harvest and the next planting season.

The farm ministry should be allowed to use drones to spray insecticides on vast swathes of northern, western and central plains – the main farm belt, Choudhary said.

(Reporting by Mayank Bhardwaj; Editing by Giles Elgood)

World Bank approves record $500 million to battle locust swarms

By Andrea Shalal

WASHINGTON (Reuters) – The World Bank on Thursday approved a record $500 million in grants and low-interest loans to help countries in Africa and the Middle East fight swarms of desert locusts that are eating their way across vast swaths of crops and rangelands.

Four of the hardest-hit countries – Djibouti, Ethiopia, Kenya and Uganda – will receive $160 million immediately, Holger Kray, a senior World Bank official, told Reuters. He said Yemen, Somalia and other affected countries could tap funds as needed.

“The Horn of Africa finds itself at the epicenter of the worst locust outbreak we have seen in a generation, most probably in more than a generation,” he said, noting the new coronavirus pandemic is exacerbating the crisis.

Locust swarms have infested 23 countries across East Africa, the Middle East and South Asia, the biggest outbreak in 70 years, the World Bank said. It threatens food supplies in East Africa where nearly 23 million people are facing food shortages.

See graphic:

The World Bank estimates the Horn of Africa region could suffer up to $8.5 billion in damage to crop and livestock production by year-end without broad measures to reduce locust populations and prevent their spread. Even with the measures, losses could be as high as $2.5 billion, it said.

Desert locusts can travel up to 150 km (95 miles) a day, sometimes in swarms as large as 250 km (155.34 miles) across, eating their own body weight in greenery.

In Kenya, the locusts are eating in one day the amount of food consumed by all Kenyans in two days, Kray said.

The new World Bank program will help farmers, herders and rural households by providing fertilizer and seeds for new crops, and cash transfers to pay for food for people and livestock.

It will also fund investments to strengthen surveillance and early warning systems to make the region more resilient over the medium- to longer-term, Kray said.

(Reporting by Andrea Shalal; Editing by Leslie Adler)

Running out of time: East Africa faces new locust threat

By Omar Mohammed and Dawit Endeshaw

NAIROBI/ADDIS ABABA (Reuters) – Countries in East Africa are racing against time to prevent new swarms of locusts wreaking havoc with crops and livelihoods after the worst infestation in generations.

A lack of expertise in controlling the pests is not their only problem: Kenya temporarily ran out of pesticides, Ethiopia needs more planes and Somalia and Yemen, torn by civil war, can’t guarantee exterminators’ safety.

Locust swarms have been recorded in the region since biblical times, but unusual weather patterns exacerbated by climate change have created ideal conditions for insect numbers to surge, scientists say.

Warmer seas are creating more rain, wakening dormant eggs, and cyclones that disperse the swarms are getting stronger and more frequent.

In Ethiopia the locusts have reached the fertile Rift Valley farmland and stripped grazing grounds in Kenya and Somalia. Swarms can travel up to 150 km (93 miles) a day and contain between 40-80 million locusts per square kilometer.

If left unchecked, the number of locusts in East Africa could explode 400-fold by June. That would devastate harvests in a region with more than 19 million hungry people, the U.N. Food and Agriculture Organization (FAO) has warned.

Uganda has deployed the military. Kenya has trained hundreds of youth cadets to spray. Lacking pesticides, some security forces in Somalia have shot anti-aircraft guns at swarms darkening the skies.

Everyone is racing the rains expected in March: the next generation of larvae is already wriggling from the ground, just as farmers plant their seeds.

“The second wave is coming,” said Cyril Ferrand, FAO’s head of resilience for Eastern Africa. “As crops are planted, locusts will eat everything.”

The impact so far on agriculture, which generates about a third of East Africa’s economic output, is unknown, but FAO is using satellite images to assess the damage, he said.

FILE PHOTO: A swarm of desert locusts flies over a ranch near the town on Nanyuki in Laikipia county, Kenya, February 21, 2020. REUTERS/Baz Ratner

PESTICIDE SHORTAGES

In Kenya, the region’s wealthiest and most stable country, the locusts are mostly in the semi-arid north, although some crops have been affected, said Stanley Kipkoech, a senior official at the Ministry of Agriculture.

This month, Kenya ran out of pesticide for about a week and a half, he said. Farmers watched helplessly as their families’ crops were devoured.

In Ethiopia, the government can only afford to rent four planes for aerial spraying, but it needs at least twice that number to contain the outbreak before harvesting begins in March, Zebdewos Salato, director of plant protection at the Ministry of Agriculture, told Reuters.

“We are running out of time,” he said.

Ethiopia’s single pesticide factory is working flat out.

The country needs 500,000 liters for the upcoming harvest and planting season but is struggling to produce its maximum 200,000 liters after foreign exchange shortages delayed the purchase of chemicals, the factory’s chief executive Simeneh Altaye said.

FAO is helping the government to procure planes, vehicles and sprayers, said Fatouma Seid, the agency’s representative in Ethiopia. It is also urgently trying to buy pesticides from Europe.

MONEY AND GUNS

Pest controllers in Somalia can’t enter areas controlled by the Islamist al Shabaab insurgency, said Aidid Suleiman Hashi, environment minister for the southern region of Jubbaland.

When the locusts invaded, residents blew horns, beat drums and rang bells to scare away the insects. Al Shabaab fired anti-craft and machine guns at the swarms, Hashi said. Jubbaland forces, not to be outdone, did so too.

Under such circumstances, contractors are reluctant to do aerial spraying, FAO said.

Meanwhile, locusts – which have a life cycle of three months – are breeding. FAO says each generation is an average of 20 times more numerous.

When eggs hatch, as they are doing now in northern Kenya, the hungry young locusts are earthbound for two weeks and more vulnerable to spraying than when they grow wings.

After that, they take to the air in swarms so dense they have forced aircraft to divert. A single square kilometer swarm can eat as much food in a day as 35,000 people.

FAO said containing the plague will cost at least $138 million. So far, donors have pledged $52 million. Failure means more hunger in a region already battered by conflict and climate shocks.

Since 2016, there have been droughts in Kenya, Somalia, Ethiopia, then floods, Ferrand said. In South Sudan, more than half the population already faces food shortages.

CLIMATE CHANGE

The rains that blessed the region with a bumper crop last year after a prolonged drought also brought a curse.

A cyclical weather pattern in the Indian Ocean, intensified by rising sea temperatures, contributed to one of the wettest October-December rainy seasons in five decades, said Nathanial Matthews of the Stockholm-based Global Resilience Partnership, a public-private partnership focused on climate change.

Locusts hatched in Yemen, largely ignored in the chaos of the civil war. They migrated across the Red Sea to the Horn of Africa, then spread to Sudan, Djibouti, Ethiopia, Somalia and Kenya. Now they have been spotted in Uganda, South Sudan and Tanzania.

The rains awoke the dormant eggs then stronger and more numerous cyclones scattered the insects. Eight cyclones tore across the Indian Ocean in 2019, the highest number in a single year since records began, said Matthews.

(Additional reporting by Abdi Sheikh in Mogadishu, Abdiqani Hassan in Garowe, Somalia, Denis Dumo in Juba; Writing by Omar Mohammed; Editing by Katharine Houreld, Alexandra Zavis and Mike Collett-White)

Smart drones to be tested in battle against E. Africa locust swarms

By Nita Bhalla

NAIROBI (Thomson Reuters Foundation) – The United Nations is to test drones equipped with mapping sensors and atomizers to spray pesticides in parts of east Africa battling an invasion of desert locusts that are ravaging crops and exacerbating a hunger crisis.

Hundreds of millions of the voracious insects have swept across Ethiopia, Somalia and Kenya in what the U.N. has called the worst outbreak in a quarter of a century, with Uganda, Eritrea and Djibouti also affected.

Authorities in those countries are already carrying out aerial spraying of pesticides, but experts say the scale of the infestation is beyond local capacity as desert locusts can travel up to 150 km (95 miles) in a day.

They threaten to increase food shortages in a region where up to 25 million people are reeling from three consecutive years of droughts and floods, say aid agencies.

Keith Cressman, senior locust forecasting officer at the U.N. Food and Agriculture Organization (FAO), said specially developed prototypes would be tested that can detect swarms via special sensors and adapt their speed and height accordingly.

“Nobody’s ever done this with desert locusts before. So we have no proven methodology for using drones for spraying on locusts,” said Cressman.

“There are already small atomizer sprayers made for drones. But with locusts, we just don’t know how high and how fast to fly.”

The swarms – one reportedly measuring 40 km by 60 km – have already devoured tens of thousands of hectares of crops, such as maize, sorghum and teff, and ravaged pasture for livestock.

By June, the fast-breeding locusts could grow by 500 times and move into South Sudan.

The impact on the region’s food supply could be enormous – a locust swarm of a square kilometre is able to eat the same amount of food in one day as 35,000 people, says the FAO.

CAN DRONES WORK?

Climate scientists say global warming may be behind the current infestations, which have also hit parts of Iran, India and Pakistan.

Warmer seas have resulted in a rise in the frequency of cyclones in the Indian Ocean. This caused heavy downpours along the Arabian peninsula, creating ideal conditions for locust breeding in the deserts of Oman, Yemen and Saudi Arabia.

Researchers are increasingly looking to technology to help provide early warning signs and control locust outbreaks amid fears climate change could bring more cyclones.

Officials in Kenya say drones could play an important role given the limited number of aircraft.

“Every county wants an aircraft, but we have only have five at the moment and they can only be in one location at one time,” said David Mwangi, head of plant protection at Kenya’s ministry of agriculture.

“We have not used drones before, but I think it’s worth testing them as they could help.”

Existing drone models are restricted in terms of the volumes they can carry and the distances they can cover due to their size and limited battery life, say entomologists and plant protection researchers.

Another challenge for drone use in such emergencies is the lack of regulation. Many east African countries are still in the early stages of drafting laws, prohibiting usage unless in exceptional circumstances and with strict approvals.

That makes it harder to deploy larger drones, which have petrol-powered engines capable of carrying tanks of up to 1,500 litres and travelling distances of up to 500 km, and often require special approval.

Drones can also be used in the aftermath of an infestation.

“The other use case for drones is in post disaster mapping,” said Kush Gadhia from Astral Aerial Solutions, a Kenyan firm that seeks to use drones to address development challenges.

“Governments need to know the extent of the damage afterwards. Combining larger satellite maps with smaller drone maps – which provide higher resolution images – will give more accurate assessments on the extent crop loss and health.”

(Reporting by Nita Bhalla @nitabhalla, Editing by Claire Cozens. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s and LGBT+ rights, human trafficking, property rights and climate change. Visit http://news.trust.org)

Somalia hit by worst desert locust invasion in 25 years

By Giulia Paravicini

ADDIS ABABA (Reuters) – Desert locusts are destroying tens of thousands of hectares of crops and grazing land in Somalia in the worst invasion in 25 years, the United Nations food agency said on Wednesday, and the infestation is likely to spread further.

The locusts have damaged about 70,000 hectares of land in Somalia and neighboring Ethiopia, threatening food supplies in both countries and the livelihoods of farming communities, the Food and Agriculture Organization (FAO) said.

An average swarm will destroy crops that could feed 2,500 people for a year, the FAO said.

Conflict and chaos in much of Somalia make spraying pesticide by airplane – which the FAO called the “ideal control measure” – impossible, the agency said in a statement. “The impact of our actions in the short term is going to be very limited.”

Ashagre Molla, 66, a father of seven from Woldia in the Amhara region 700 km (435 miles) north-east of the Ethiopian capital Addis Ababa, said he had so far received no help from the government.

“I was supposed to get up to 3,000 kg of teff (a cereal grass) and maize this year, but because of desert locusts and untimely rains I only got 400 kg of maize and expect only 200 kg of teff.

“This is not even enough to feed my family,” he said.

The locust plague is far more serious than the FAO earlier projected and has been made worse by unseasonably heavy rainfall and floods across East Africa that have killed hundreds of people in the past several months.

Experts say climate shocks are largely responsible for rapidly changing weather patterns in the region.

(Reporting by Giulia Paravicini and Dawit Endeshaw; Editing by Maggie Fick and Giles Elgood)

Kudlow says U.S. expects China to start purchasing crops very soon

FILE PHOTO: White House chief economic advisor Larry Kudlow speaks with reporters on the driveway outside the West Wing of the White House in Washington, U.S. June 27, 2019. REUTERS/Yuri Gripas

WASHINGTON (Reuters) – White House economic adviser Larry Kudlow said on Thursday the United States expects China to start purchasing crops and U.S. agricultural products soon and noted that trade talks between the two countries are ongoing.

The United States and China agreed last month to restart trade talks that stalled in May. President Donald Trump agreed not to impose new tariffs and U.S. officials said China agreed to make agricultural purchases, but those have not yet materialized.

(Reporting by Jeff Mason; Editing by Chizu Nomiyama)