Saturday, July 24

Freak Brazil frost hits heart of coffee belt, damaging crops


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SAO PAULO/NEW YORK — An unusual cold snap, with temperatures dropping to freezing levels in a matter of minutes, delivered a blow to the heart of Brazil’s coffee belt, damaging trees and harming prospects for next year’s crop, farmers said on Wednesday.

Agricultural products across the western hemisphere have been beset by unusually bad weather – be it floods or extreme drought – all season. Brazil is the world’s largest coffee producer, as its climate is most conducive for production of the beans. Coffee prices surged nearly 14% in response to the frosts, nearing four-and-a-half year highs.

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The sudden frost happened in the morning of July 20. Farmers, brokers and analysts were assessing their crops on Wednesday after reports that the cold snap was much stronger than expected.

“I’ve never seen something like that. We knew it would be cold, we were monitoring, but temperatures suddenly went several degrees down when it was already early morning,” said Mario Alvarenga, a coffee producer with two farms in the southern part of Minas Gerais, Brazil’s largest producing state.

Farmers shared pictures of their crops, where large black areas were visible in places where they should see dark green spots marking coffee trees.

“I will probably have to take out some 80,000 trees, they are burned all the way to the bottom,” said Airton Gonçalves, who farms 100 hectares of coffee in Patrocinio, in the Cerrado region of Minas Gerais.

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“I was going to the farm yesterday and a sensor in the truck started to alert me about ice in the road. I thought the system had gone crazy. But when I got to the farm, it was covered in ice, the roofs, the crops.”

According to reports, the frost hit areas all the way from the south to the central parts of Minas Gerais.

Joel de Souza Borges, a coffee broker in Patrocinio, believes that around 50% of farms in the Cerrado region were hit. He said this year’s production will not be harmed, since most areas were already harvested, but production in 2022 is a question mark .

“In some cases the trees recover, you need to cut down some of the branches. In other cases, you have to take the tree out and replant,” he said.

Farmer Gonçalves estimates his production in 2022 will fall from 5,500 bags to around 1,500 bags.

(Reporting by Marcelo Teixeira; editing by David Evans)



financialpost.com

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