The Paraguay River has reached its lowest level in half a century after months of extreme drought in the region, exposing the vulnerability of landlocked Paraguay’s economy.

Some 85% percent of Paraguay’s foreign trade is conducted via the river, which has been depleted because of a lack of rainfall in the Pantanal area of Mato Grosso state in Brazil. The river flows from that area and also runs through Bolivia and Argentina.

The fall in the water level has slowed down cargo vessel traffic on the Paraguay River, causing significant cost overruns for the transport of fuel, fertilizer, food, and other imported goods. The crisis has also exposed the precariousness of Paraguay's access to drinking water.

The bottom of the Paraguay River emerges from the water amid historically low water levels near the Remando bridge in Mariano Roque Alonso, Paraguay,, Oct. 7, 2020. (AP Photo/Jorge Saenz)

“We have never had a situation as serious as the one we are experiencing now. We are approaching the end of the year, a time when more products must enter," Nery Giménez, president of the Paraguayan Importers Center, told The Associated Press.

The government had announced the lifting of the strictest parts of its pandemic-related lockdown, but hopes of a resurgence of economic activity have been undermined by the river problem, Giménez said.

Esteban dos Santos, president of the Paraguayan Shipowners’ Center, said losses in Paraguay’s river transport sector have already reached $250 million.

“What worries us the most is that the river is going down at a rate of 3 or 4 centimeters (1.2 to 1.6 inches) per day. The navigation situation is critical. In a week, no boat will be able to reach Asunción, ”dos Santos said.

Paraguay could face bigger price increases and fuel and other shortages if the situation continues to deteriorate. Wildfires have also broken out in parts of the country because of the dry conditions.

The falling levels of the Paraguay River have yielded one surprise: a rocky islet in Asunción that geologists say is part of an extinct volcano dating back more than 40 million years.

A fisherman searches for eels in the mud of the dried up Paraguay River in Chaco-i, across the river from Asuncion, Paraguay, Thursday, Oct. 8, 2020. (AP Photo/Jorge Saenz)

A worn Paraguayan flag flies across from the Chaco-i port where a barge sits on a dry bank in Asuncion, Paraguay, Thursday, Oct. 8, 2020. (AP Photo/Jorge Saenz)

A fisherman searches for crabs in the Paraguay River near the Remanso bridge in Mariano Roque Alonso, Paraguay, Thursday, Oct. 8, 2020. (AP Photo/Jorge Saenz)

Birds gather on the sandbanks that were unearthed by the historically low level of the Paraguay River in Asuncion, Paraguay, Tuesday, Oct. 6, 2020. (AP Photo/Jorge Saenz)

Workers rest at sunset on the shore of the Paraguay River in Asuncion, Paraguay, Wednesday, Oct. 7, 2020. (AP Photo/Jorge Saenz)

Homeless men cook under the main pier of the Paraguay River, devoid of water amid a drought in Asuncion, Paraguay, Wednesday, Oct. 7, 2020. (AP Photo/Jorge Saenz)

A ship extracts sand from the river bed of Paraguay River, taking advantage of its low water level, off the shores of Asuncion, Paraguay, Thursday, Oct. 8, 2020. (AP Photo/Jorge Saenz)

A tugboat pushes a barge carrying dry cement over the Paraguay River from Mariano Roque Alonso to Asuncion, near the Remanso Bridge in Paraguay, Wednesday, Oct. 7, 2020. (AP Photo/Jorge Saenz)

The remnants of an ancient volcano are exposed in the Paraguay River in Asuncion, Paraguay, Tuesday, Oct. 6, 2020. (AP Photo/Jorge Saenz)

People walk on the remnants of an ancient volcano exposed in the middle of the Paraguay River, off Asuncion, Paraguay, Tuesday, Oct. 6, 2020. (AP Photo/Jorge Saenz)

Cracked earth is exposed in the riverbed of the Paraguay River in Chaco-i near Asuncion city, Paraguay, Thursday, Oct. 8, 2020. (AP Photo/Jorge Saenz)

A man fishes from a rock unsurfaced by the historically low water lever of the Paraguay River near the Remanso bridge in Mariano Roque Alonso, Paraguay, Wednesday, Oct. 7, 2020. (AP Photo/Jorge Saenz)