Typically, in September, Brazilian coffee growers would be filling warehouses with the world’s largest harvest of gourmet beans. Trucks often wait in queues for an entire day to collect their cargo.
This year, the harvest is so small that the long lines of trucks have practically disappeared.
Brazil probably harvested nearly 40% less arabica coffee than last year, and the fewest since 2009, according to crop forecasting agency Conab. The loss equates to about two-thirds of American consumption, and Americans drink the most coffee in the world. Dramatically lower production could mean a shortage of beans.
“There is no line of trucks waiting to load coffee into the warehouses,” said Regis Ricco, director of RR Consultoria Rural, based in Minas Gerais. “The farmers send a truck with coffee to the warehouses and a few hours later the truck returns, when it would normally take up to a day. It’s alarming. “
The fact that the Brazilian harvest continues to decline means that prices will continue to rise for consumers who want a gourmet morning drink. Expensive coffee is just one of many staples experiencing inflation, fueling concerns about rising food costs around the world.
Brazil’s crop was affected by drought in several places, combined with frost and frost in July. On top of that, the nation’s harvest fluctuates each year between a low and high yield cycle, and this year it was a smaller one.
Farmers in Brazil likely collected 30.7 million bags of arabica this year, compared to 48.8 million last year, Conab said in a report Tuesday. A bag weighs 60 kilograms.
Arabica futures have gained 44% so far this year at ICE Futures US in New York.
The gourmet coffee shortage has already prompted Brazilian roasters to switch to robusta, a cheaper and bitter-tasting variety of beans. Coffee blends that were half robust will hit 90% this year, said Marcio Candido Ferreira, director of Espirito Santo-based marketer Tristao Cia. of Foreign Trade.
Although the robusta harvest is at a record in Brazil, it is completely sold out as buyers compete for supplies, Ferreira said.
Little relief is seen coming. Even before the devastating frosts in July, the US estimated Brazil’s reserves to be the lowest in decades. Adverse weather will severely damage the next two arabica coffee crops, and droughts will be twice as destructive as frosts, José Donizete Alves, a researcher at the Federal University of Lavras, said at an industry conference on Tuesday. The country’s dry season is forecast to start earlier than usual next year, according to Luiz Carlos Molion, a meteorologist.
Still, spikes in coffee prices have historically been transitory. The rallies of around 60% have been the threshold for more supply and price caps, according to Bloomberg Intelligence.
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