As reported by Open4Business, heavy rains in Brazil have worsened the quality of the new coffee crop and may lead to a shortage of high-quality coffee. of Arabica beans on the global market, while futures for the variety have risen about 35% since June, according to Bloomberg.
Brazil is the world's largest producer of Arabica and provides about 45% of its global production, so problems with the quality of the crop could affect the supply of premium coffee far beyond the country's borders.
The main problem has been extremely
intense rainfall during the harvest harvest In June, rains knocked a large number of ripe coffee berries off the trees, after which they lay for several days on waterlogged ground, which increases the risk of fermentation, mold and undesirable flavors.
According to Simão de Lima, head of the Expocacer cooperative, which unites more than 800 producers in the Cerrado Mineiro region of southeastern Brazil, on average about 20% of coffee berries were knocked down by the rains compared to normal ones. 5-7%.
So, we are not talking about the loss of 20% of the entire Brazilian crop, but about significant damage to products in one of the most important regions for the production of high-quality Arabica.
The situation was worsened by a second wave of rain in July. The rains had already fallen on the harvested beans, which had been laid out for drying, forcing some producers to start the drying process all over again.
According to the meteorological company Vaisala, rainfall in some areas of Brazil's coffee belt in June and July reached 250-500% of the climate norm, and in some places up to eight times more rain fell than usual.
Quality problems are already affecting market. Arabica futures are up about 35% since June, offsetting much of the year-to-date price decline.
In the physical market, high-quality Brazilian coffee is trading at a premium of up to 15 cents a pound compared to New York futures.
Especially notable could be the reduction in coffee that meets Intercontinental Exchange certified warehouse standards. (ICE) in the USA and Europe.
In a typical year, approximately 30–35% of production from the Cerrado Mineiro region meets ICE requirements. After this year's rains, this share, according to de Lima, may decrease to 10-15%. At the same time, coffee stocks in ICE-certified warehouses are already approaching the lowest levels of this century.
This may increase competition between international roasters for quality beans. Bloomberg notes that Brazilian Arabica is used, in particular, by Starbucks, Lavazza and Illy.
At the same time, it is still premature to talk about a shortage of coffee in general. The U.S. Department of Agriculture expects global coffee supply to exceed consumption by about 10 million bags in the season that begins in October, the largest surplus in six years. One of the main factors should be the record production in Brazil itself.
Therefore, the main problem of the market is not so much the total amount of coffee, but the availability of high-quality Arabica. Large producers can partially compensate for the shortage by changing the composition of coffee blends and purchasing grains from other regions, however, for the premium segment, the situation may lead to a further increase in purchase and retail prices.
An additional risk for the market remains the weather. Reuters notes the strengthening of the El Niño phenomenon, which in the 2026-2027 season may further increase the volatility of coffee, cocoa and other tropical agricultural products markets.
https://open4business.com.ua/svitu-zagrozhuye-deficzyt-kavy-cziny-zrosly-na-35/
