Coffee price breaks record with high demand and adverse weather conditions

Amidst a scenario of heated external demand and lower supply in several producing countries due to adverse weather conditions, the price of coffee traded on the market broke its historical record during 2021.

The price of coffee on the New York Stock Exchange (Nyse) ended last December quoted at US$ 226.10 (R$ 1,273), with an increase close to 76% compared to the end of 2020, according to data from Bloomberg.

During the second half of the year, intense cold waves had an impact both on plantations and on the pockets of consumers in the country. The temperature in free fall in the period, accompanied by frost, can cause damage in the field and, therefore, tends to pressure prices of products grown in parts of the South and Southeast.

Coffee, vegetables and fruits are part of the list of goods that are more expensive in case of further damage to the plantations.

“The phenomenon exponentially increases the challenge for rural producers to maintain the level of productivity in the field and to plan food negotiations. Crops such as coffee, corn, sugarcane, wheat, bananas and cassava may be the most affected by the arrival of this cold front”, pointed out a note released by Faesp (Federation of Agriculture and Livestock of the State of São Paulo).

Researcher Felippe Serigati, from the FGV Agro study center, pointed out that the falling temperatures are a cause for concern in the countryside. If there is loss in crops, the impact will certainly reach consumers, said the expert.

“This effect on prices does not reach supermarket shelves immediately, but it does. The impact tends to be faster in products with a shorter cycle, such as produce,” stated the researcher.

The coffee harvest in Brazil in 2021 was estimated at the end of December at 47.7 million 60 kg bags, compared to 46.9 million in the survey released in September, pointed out Conab (National Supply Company), which raised the forecast citing higher than expected productivity.

“The fourth survey brought a slight increase in productivity compared to the previous one, as a result of the producers’ perception that the frosts had a smaller impact than expected, particularly in areas where the harvesting process had already started,” said Conab.

Even so, Conab pointed out a 24.4% drop in the country’s coffee production in 2021, compared to the record of 2020. The year 2021 was the year of low in the biannual cycle of Arabica coffee, a situation that was accentuated by the prolonged drought.

with Reuters