Threat posed to coffee crops in Brazil
August 11, 2021 - The price of a cup of coffee is rising as the cost of Arabica beans hits seven-year highs after severe weather and the pandemic devastated Brazilian producers. Brazil supplies 40% of the world’s coffee.
Brazil coffee producing states have been dealt blow after blow over the past year. The impacts of the coronavirus pandemic -- including sick workers and skyrocketing freight costs -- coupled with the worst drought in nearly a century and freezing conditions -- have hit the nation’s coffee industry hard.
In July, an unusually harsh cold snap triggered frosts that wiped out more than 10 per cent of Brazil’s coffee crops. The most recent severe frost was in 1994, and in that case, there was a devastating combination of drought and frost.
Arabica coffee futures eased to $1.8 per pound on Wednesday (August 11) from an almost seven-year high of $2.09 hit on July 27 as concerns eased over the impact of severe weather on Brazil’s four largest growing regions Paraná, Sao Paulo, Minas Gerais and Bahia.
Still, prices are up more than 5 per cent in the last 12 months after the drought from April to June cut 2021 output. According to the United States Department of Agriculture, global coffee consumption will exceed production this year for the first time since 2017.