Coffee futures prices see the largest increase in 25 years. Brazil's production falls due to flooding. The impact of the transportation industry on coffee supply.

Source:Best Coffee > News Author:qjroot Published:2022-01-03 14:24:53

Only one day is left in 2021, and this year, coffee beans have been one of the winners among major commodities. The bad news has come one after another, with the price of Arabica futures on the New York Intercontinental Exchange and Robusta futures on the London Exchange rising again and again. Although there were several pieces of good news in between, such as rain in Brazil and a bumper harvest in Vietnam, overall, it’s still like a car with no brakes—continuing to surge at a rapid pace. This year’s Arabica prices have also seen the largest annual increase since 1996.

Brazil's coffee trees have been affected by extreme weather conditions this year, including drought and frost. Even though a timely rain revitalized the trees and enabled them to bloom properly, the long-term impact on the trees has been significant, with some areas experiencing flowering without fruit development. Brazil's next coffee harvest is expected to see a production decrease of 10 to 12 million bags. According to estimates by Brazil's official agency Conab, the country's coffee production in 2021 was only about 47 million bags, a reduction of approximately 25% compared to 2020. (60 kg per bag)

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In November 2021, La Niña persisted for the second consecutive year, and parts of Brazil also experienced heavy rainfall, leading to flooding. Among them, two major coffee-producing states in Brazil were severely affected. Coffee farms in low-lying areas of Espírito Santo and Bahia were inundated by rainwater, significantly increasing the likelihood of coffee pests and diseases. The coffee trees were unable to grow normally, resulting in reduced yields for the next harvest season.

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However, over the past two weeks, the flooding in Bahia has intensified. According to CNN on December 28 U.S. time, the floods in Bahia have killed at least 20 people, displaced thousands, and ruined COVID-19 vaccines. The disaster also damaged road infrastructure in Bahia, Minas Gerais, São Paulo, and other regions. This means more new cases and coffee trees not receiving proper care.

Coffee futures prices see the largest increase in 25 years. Brazil's production falls due to flooding. The impact of the transportation industry on coffee supply.

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