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Brazilian coffee farms are close to suffering a third straight year of losses from drought if rain fails to arrive in the coming weeks, foiling a good start to flowering and further tightening global stocks of the commodity, specialists said on Tuesday.
After posting a very good primary flowering in mid-September, follow-up rains, which are needed to assure that young coffee buds develop and do not simply fall off the branches, have yet to materialise.
Forecasters expect widespread precipitation in the coffee belt next week at the earliest. But a blockage of hot, dry air is also expected to form in the region, presenting a risk of spoiling producers’ hopes for rain. Jose Braz Matiello, agronomist at the coffee research group Procafe, said no significant losses have been registered so far. But he added that coffee fruit could start to fall off trees between 80 and 100 days after flowering if rains are irregular.
“The fears of the market ... are focused principally on the question of El Nino, which makes rain more sparse here in the coffee areas and heavier in the southern states and this is already being seen,” Matiello said.
He added that high temperatures currently building over the coffee belt were also a risk for trees while the rains remained irregular.
Coffee futures prices on the New York ICE exchange have steadily climbed 18 per cent from a month ago at $1.34/lb. Markets have been jumpy in the face of record low stocks of the commodity expected in the second quarter of 2016 before Brazil starts harvesting the new crop.
“We need rain for trees to grow leaves to shade the young coffee fruit and sustain them on the branches,” said Adelson Costa at the Varginha, Minas Gerais-based Costa Comissaria de Cafe brokerage.
Some isolated or scattered showers could fall over the next week, meteorologists say, but this will only help some farms. The coffee belt needs a widespread rain that only a cold front can bring.
The robusta areas of Brazil’s No 2 coffee-producing state of Espirito Santo are in the most critical need of rain. State officials banned the use of irrigation in several townships and restricted its use in the rest of the state to night time.
The state suffered a severe drought in January that erased as much as 2 million bags (of 60 kg each) from its potential output this year, which reached almost 11 million bags.
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