Brazil - Over 100 million kilos of coffee expected to be lost to frost

20.08.2021

At the end of June and into early July, unexpected frosts hit Brazilian coffee growing regions in Sao Paulo, Minas Gerais, and Goias, doing then unknown damage to crops. Nearly two months later, estimates are beginning to roll in, and the number of 60-kg bags of green coffee are expected to be in the millions. 

The frost—which was been described as “moderate events, not as severe as we saw in 2001 and 1994”—has caused significant movement in the price of coffee on the commodities market, pushing the price above $2.00/lb for the first time since 2014. The jump came from the potential hit in production the world’s largest coffee producer would take from the unexpected cold front. Per Reuters, Tropical Research Services (TRS) in a recent webcast put that loss at 2.7 million bags for the 2022/23 harvest, roughly 4% of the total crop. 

The TRS estimate is one of the lower figures on the subject. One exporter, Guaxupe, estimates losses to reach 4.5 million bags, whereas coffee trader Comexim states that there could be a 20% drop in production from the south of Minas Gerais, the country’s largest producing region. 

And yet, TRS believes that the frost won’t be the largest contributor to production loss for the 2022/23 harvest. They state that draught will lead to another loss of 6.3 million bags of Arabica in Brazil. 

It truly is a climate change-caused damned if you do, damned if you don’t situation for Brazilian coffee producers. When not having crops destroyed by a lack of water, they are having to navigate deleterious water falls in the form of frost or deluge from flooding. While it is, temporarily at least, helping boost the global price of coffee to something closer to livable, the ends hardly seem to justify the means. And as soon as production stabilizes, the price is sure to drop yet again. The market will only continue its volatility as climate change wreaks further unpredictability unto coffee farmers, and frankly, the only way to stabilize it is regulation. 

 

Source – https://sprudge.com 

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