Top Stories
Top Stories

Emergency: Caterpillars devour Brazil's grain

Wheat field in Brazil
Adriano Machado | Bloomberg | Getty Images

Infestations of the Helicoverpa caterpillar in Brazil's grain belt prompted the agriculture ministry on Monday to declare a state of emergency in the leading soy state of Mato Grosso, highlighting the potential risk to large parts of the crop.

The ministry's head of supply, Antonio Andrade, also declared an emergency in the state of Bahia, a smaller but important producer state where difficulty controlling pests caused financial losses for producers last year.

(Read more: Proposed ethanol reduction could hurt farmers)

State governments will draw up guidelines for dealing with the pest that is believed to be a serious threat to crops.

Why trust investing in Brazil?

Production cost in areas where the caterpillar is most prominent are going to rise for farmers as fighting the pest often involves multiple applications of insecticide and destruction of plant material that host to the caterpillar.

Brazil, one of the world's biggest exporters of soybeans and corn after the United States, is nearly finished planting what is expected to be a record soy and bumper corn crop that will start harvest in early 2014.

(Read more: How farm waste may make biofuels matter again)

The caterpillar can also destroy cotton crops.

—By Reuters