Brazilian Coffee prices soar is Brazilian Coffee expensive

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Generally speaking, in the coffee supply chain, coffee growers have the lowest carbon emissions, while transportation, roasting and sales are the largest. However, as coffee cultivation requires specific climatic conditions, coffee growers have become the most directly and seriously affected group in the supply chain.

Due to the global La Nina phenomenon in 2020, it will bring drier weather to Brazil. Today, most of Brazil has not had rain for many months in a row. The rainfall at the end of last month can only be described as a drop in the bucket, not enough to save Brazil from months of drought. Brazil is suffering its worst drought in 91 years.

The dry weather has severely affected the world's largest supplier of raw sugar and coffee, which have become commodities whose prices have hit multi-year highs, and coffee futures have been pushed to new highs. Coffee futures hit a four-and-a-half-year ceiling on Friday. Today, the climate in Brazil is also very worrying, and the soil moisture in Minas province is not ideal, which is related to the production of coffee in 2022. Brazil's Ministry of Mines and Energy says the drought will continue in the coming months, especially in the southeast and Midwest.

The Parana basin, home to the state of Minas Gerais, Brazil's largest coffee-producing region, has suffered a drought and is expected to last until August, according to a commodities report released by Commerzbank.

Brazil's coffee harvest is expected to be 20 per cent complete, according to data provided by Safras&Mercado, a consultancy. Coffee crops will begin to blossom in September, and Brazil's current dry climate does not bode well for the 2022 / 23 harvest. The protests in Colombia have also affected transport costs in Brazil.

Among soft commodities, July Arabica coffee bean futures rose 4.05 cents, or 2.6%, to $1.6165 per pound, while July Robusta coffee bean futures rose 1.4% to $1612 a tonne. The International Coffee Organization (ICO) said the composite index rose 10.4 per cent in May to 134.78 cents a pound, the highest level since February 2017.

As the largest producer of coffee in Brazil, coffee production has been affected by the persistence of this dry climate, and coffee prices have soared. When will this situation come to an end?

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