Published: 15:25, December 18, 2020 | Updated: 07:45, June 5, 2023
Brazil drought damage may cut high-end coffee crop for 2 years
By Bloomberg

A worker harvests coffee on a farm in Alfenas, Minas Gerais state, Brazil, on May 28, 2019. (PHOTO / BLOOMBERG)

A drought “disaster” that’s eroding prospects for Brazil’s next crop of beans preferred by major coffee chains may carry over to the following season, a leading analyst said after a tour of farms in the world’s top grower and exporter.

“I was floored by the conditions at some of these farms,” Judy Ganes, the president of J. Ganes Consulting, said in a telephone interview after examining crops in Minas Gerais, Brazil’s top state grower. “I have never, ever seen anything like this,” said the consultant, who has covered the industry for more than three decades.

Brazil’s Agriculture Ministry said last month that some estimates provided to the government indicate 2021 losses of 15 percent to 40 percent from 2019, the previous lower-yielding half of a biennial cycle

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Brazil’s Agriculture Ministry said last month that some estimates provided to the government indicate 2021 losses of 15 percent to 40 percent from 2019, the previous lower-yielding half of a biennial cycle. Ecom Trading and Volcafe, two major traders, projected declines of a third from a year earlier. Arabica-coffee futures have jumped 34 percent from the 2020 low of 94.55 cents a pound on June 15 following the dry weather.

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“So far, I’ve just seen skeletal trees or trees that look lush from afar and then you get close to them, and there’s no coffee,” Ganes said after visiting municipalities including Varginha, Alfenas and Tres Pontas. “You had a first flowering failed, and this is the result.”

Minas Gerais accounts for 70 percent of Brazil production of arabica, the variety favored by Starbucks Corp.