Arabica prices skyrocketed due to abnormal frosts and drought in Brazil

    02 Aug 2021

    Soon a cup of coffee will become a luxury: arabica has skyrocketed in price, to a maximum from the 2014 year, Forbes states.

    In Brazil this year, there were two cataclysms at once: first abnormal frosts, then abnormal drought. The plantations have been hit hard, and the world’s coffee has dwindled.

    Coffee shops have already announced that prices will rise by 10-20%. So we have to fall in love with some other drink?

    Stock prices for Arabica coffee rose to their highest since 2014. Prices are rising amid abnormal frosts in Brazil, the world’s largest coffee supplier, following a severe drought. Due to extreme weather in the country, about 11% of crops were affected.

    Arabica coffee futures have surpassed $2 per pound during trading on the Intercontinental Exchange, rising to a high since October 2014, Trading Economics reports. At its daily high, coffee was worth more than $ 2.09 a pound.

    Arabica rises in price amid concerns about reduced supplies due to abnormal frosts in Brazil, the world’s largest coffee supplier, Trading Economics notes. Temperatures are falling in three key coffee regions of the country: Parana, São Paulo, and Minas Gerais.

    The frost followed the worst drought in nearly a century, which led to one of the most significant production declines in two decades, Trading Economics writes. Meanwhile, the demand for coffee machines and instant coffee is growing, and cafes are beginning to recover from the pandemic and invite more and more visitors, the resource notes.

    According to Reuters, last week, severe frosts damaged most of the crops in the Brazilian “coffee belt,” and a new polar air mass may cover the same regions at the end of this week. This will be the third cold front to hit Brazil this year.

    According to preliminary estimates of the Brazilian authorities, last week frost affected from 150,000 to 200,000 hectares of fields – about 11% of the total area of ​​Arabica crops in the country. “This is the first time since 1994 that such a weather phenomenon has occurred in the country,” coffee trader I & M Smith noted in the review.

    Low temperatures are especially detrimental to young coffee trees, Bloomberg noted. Consultant Judy Gaines told the agency that the death of young trees increases the likelihood that weather will threaten crops even two years after the frost. Farmers will have to cut off damaged branches, reducing yields, or even replant fields, the expert noted.

    Especially extreme weather will hit small coffee factories, and retail prices in stores will rise along with the rise in exchange prices, writes Reuters. “We only have stocks until September. This year, we have already raised prices three times, following the market changes. Still, the situation remains difficult,” said Luciana Carneiro Mendes, partner of a small Brazilian roaster, Cafe Carneiro, in a conversation with the agency.

    According to her, in Brazil, a bag of coffee weighing 60 kg, which cost 400 reais in December (about $77), rose in price to about 800 reais in July, and according to forecasts, it may soon rise to 1,000 reais.As we wrote previously, due to climate change, the yields of favorite products may fall by 20%, 50%, 85%, and prices will rise accordingly. This will not start a world famine. But the list of earthly joys that we will lose due to the climate crisis may be expanded.

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