A surprise frost that struck Brazil’s coffee belt last week hit farmers hard.
Financial Post says industry experts fear farmers may default on deliveries of recently-harvested coffee that were sold to traders months ago at prices that are half of the current value.
Temperatures dropped below the freezing level on the morning of July 20, delivering a big blow to the heart of the coffee belt, damaging trees so much that it may harm prospects for next year’s coffee crop.
Late last week, industry estimates on possible losses to next year’s coffee crop varied widely.
Initial forecasts for a loss of 1-2 million bags quickly increased.
One Brazilian exporter expects a cut of approximately 4.5 million bags.
Initial 2022 production estimates totaled almost 70 million bags.
Judy Gaines, a U.S.-based commodity analyst, says it might be too soon to speculate on the damage. “There are a lot of aerial photos going around,” she says.
“But nobody knows if those trees will only have to be pruned, which will result in zero production next year, or if they need to be taken out, which means no production for the next two or three years.”
(Story Courtesy of the NAFB News Service)
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