The frost events that hit coffee fields in Brazil in recent weeks will cause a loss of around 4% to production in the next season, according to forecaster Tropical Research Services (TRS) in a webcast organised by Intercontinental Exchange Inc.
"The frosts were moderate events, not as severe as we saw in 2001 and 1994," said Steve Wateridge, the company's global head of research.
Wateridge said TRS expects a loss of around 2.7 million 60-kg bags to Brazil's 2022/23 coffee crop potential from the frosts, taking into consideration the forecaster's initial estimate for a crop around 68 million bags next year in the world's largest producer and exporter.
Forecast
TRS' loss estimate is one of the lowest seen so far in the market. Brazilian exporter Guaxupe sees a potential loss of 4.5 million bags, while trader Comexim expects nearly a 20% fall in the production potential for the south of Minas Gerais, the largest producing region in Brazil.
Wateridge said TRS had sent people on the ground in Brazil into the affected areas after the frosts and checked the situation of the trees.
For him, the current drought in Brazil will have a larger impact than the frosts. TRS currently estimates a loss of 6.3 million bags for the potential arabica production next season from the drought.
He expects the current high coffee prices, if sustained, to boost production in other countries, possibly offsetting the losses to frost seen in Brazil.
In May of this year, coffee association Anacafe said that coffee exports from Guatemala, the world's sixth largest arabica exporter, are set to fall up to 3% this season due to low farmgate prices, a lack of workers and erratic rains linked to climate change.
News by Reuters, edited by ESM. For more Supply Chain stories, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.
