Chilling Prospects for Coffee and Sugar Exports as Cold Snaps Grip Brazil
Global food prices have continued to rise. Labor disruptions, shipping complications, and extreme weather are all taking their toll on the supply chain and ultimately the consumer. Some market watchers and officials are confident price fluctuations will begin to smooth as reopening efforts continue and vaccine rates increase, but optimism is also unsteady. When it comes to two of the world’s most in-demand crops, a steep rise in cost may be on the horizon.
Brazil is currently enduring an unusually harsh winter with extreme and sudden temperature drops in the southeast, which have majorly affected the country’s coffee and sugar cane belt. Frosts in late July have been some of the most severe, with temperatures dropping at rates not seen since 1994. The effect on sugar cane plants and coffee trees has been detrimental and compounds the impact of some of the worst droughts in 90 years.
A Scorching Impact on Crops
So far, the cold snap has damaged nearly half a million acres of coffee fields. The unexpected frost has scorched the leaves and branches of arabica and robusta bean crops. Severe temperatures have also damaged more than a quarter of sugar cane fields. The news has led to notable jumps in coffee futures and is expected to have a lasting impact on the price of more than just coffee and sugar; Brazil’s corn and citrus exports are also likely to steepen.
Preliminary reports from agronomists and exporter estimates state that the cold snap will affect export rates well into 2022. This is no insignificant projection as coffee prices have already jumped to rates not seen in over six years.
Empty Warehouses and High-Cost Cafe Tabs
Apart from the effects of extreme weather, soaring prices continue to be affected by a shortage of shipping containers and meager coffee yields from last year’s growing season. The result could mean empty coffee warehouses and roasting rooms across the globe, or at the very least, a much higher tab with each trip to the cafe or convenience store for that morning cup.