(Ecofin Agency) – In the world coffee market, Brazil reigns supreme. While an overflow of the country’s harvest has often weighed down world prices, poor production prospects are currently leading to price panics.
Arabica coffee listed in New York hit $ 1.90 per pound on July 22, its highest level in six and a half years. This surge in prices is mainly explained by the risks weighing on the supply, particularly in Brazil, the world’s largest supplier of beans.
The South American country has indeed been facing since the beginning of this week a strong episode of frost that hit the plantations located in the heart of the production belt, which threatens the flowering of coffee trees and future supply. While it is still early for a damage assessment, some Brazilian exporters estimate the frost could lower coffee production by 4.5 million bags, forecast to reach 70 million bags by next year.
This extreme weather episode comes at a time when the coffee sector was already affected in the first half of the year by the strongest drought the country has experienced in nearly 90 years. For some analysts, this chain of events coupled with the unfavorable year of the Arabica biennial cycle in 2021/2022 should further drive up the prices of the product in the coming months.
Espoir Olodo
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