(Bloomberg) -- Dry weather risks damaging Brazilian crops of the cheapest coffee bean variety, threatening to make instant coffee less affordable.
Lack of rain and above-average temperatures are expected to cause the world’s largest coffee producer to harvest less of the robusta bean type than expected. Weather impacts from El Niño will reduce output from a key producing region of the beans used in instant coffee.
Production is already expected to be 15% to 20% lower than initial estimates, said Edimilson Calegari, general manager at Cooabriel, an Espirito Santo-based cooperative that operates in Brazil’s largest growing region for robusta. If such a forecast becomes true, it would mean the smallest crop since at least 2020, with output coming below 20 million bags.
“We are very concerned and very frightened by this situation,” said agronomist Fabiano Tristão, who coordinates coffee studies at Espirito Santo’s agriculture research institute, Incaper.
Coffee areas in northern Espirito Santo haven’t had the widespread rains expected for this time of year. That brings concerns for the crop to be harvested in May, especially given high temperatures. After a good start to the season in August, trees are suffering heat stress when beans should be growing. While most farmers in the region use irrigation systems to keep soil moist, there’s no effective way to curb the impacts of heat, Tristão said.
Read More: Coffee Lovers to Endure More Pain as Vietnam’s Crop to Fall
Dryness in Espirito Santo became so severe that local authorities declared a state of alert last Friday. Water consumption is being limited to prevent a shortage, and irrigating farms will only be allowed at night, state water agency Agerh said.
The impacts of dry Brazilian weather have already heightened volatility in coffee markets, StoneX analyst Fernando Maximiliano said. Robusta futures have surged 42% this year, with the potential harm to Brazil’s next crop adding to worries while top exporter Vietnam also faces negative impacts this year from El Niño.
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