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Saturday, May 22, 2021

Droughts come and go. They ususally hurt farmers, as in Brazil. But the drought in Taiwan could affect chip making companies!

May 17 – Bloomberg (Fabiana Batista):  
“Brazil, the world’s biggest exporter of coffee, sugar and orange juice, just had a rainy season that brought hardly any rain. Soils are parched and river levels are low in the nation’s Center-South region, a powerhouse of agricultural output. The drought is so severe that farmers are worried they’ll run out of the water reserves that help keep crops alive over the next several months, the country’s dry season… The prospect of withering orange trees and coffee plants is coming at a time when agricultural crops are rallying to multiyear highs, which has fanned fears of food inflation. Higher food costs may exacerbate hunger, a problem around the globe that the Covid-19 pandemic has made more acute.”
 
May 19 – Reuters: 
“Taiwan will tighten curbs on the use of water from June 1 in the major chip making hubs of Hsinchu and Taichung as it battles an islandwide drought, if there is no significant rainfall by then, the government said… Describing the drought as the worst in the island's history, the economy ministry said in the absence of rain it would raise the drought alert level to its highest, requiring companies in the two science parks to cut water consumption by 17%.”