Brazil’s Frost Brings Coffee Supply Shock Not Seen Since 1975, Says Ganes
CoffeeNetwork (New York) – The 2021-2022 coffee crop in Brazil should be spared significant damage from the recent frost event, says commodities analyst Judy Ganes in an interview with CoffeeNetwork. According to Ganes, the current crop is mostly harvested and the beans are fully formed. “There could be some loss in quality, but that’s it,” she says. “It is the 2022/23 crop that is compromised and even 2023/24.”
Ganes has toured Brazil’s coffee belt three times since the beginning of the current crop cycle; the first time, in December, she observed the branch growth was below normal and that would reduce the potential recovery. In February and the same conditions were present. “Increased rainfall didn’t help the vegetative growth,” Ganes noted. “When I was back for my third pandemic visit earlier this month, I noticed another potential problem. Due to the June rains the trees were showing budding far too early. Now the frost hit and the trees will defoliate and many die.” For the trees that survived, this defoliation could be detrimental to production in the next crops.
“Additionally, it would seem that younger trees and those previously skeletonized would be the most vulnerable to damage, whereas it is these trees that were able to withstand the drought better,” she explains. “The extent of damage seems fairly extensive, but there is another concern I have that there won’t be enough coffee seedlings for replanting and that will keep the recovery capped longer term. Farmers may opt to temporarily grow corn or soybeans if the price of nursery stock is too expensive or not available.”
With approximately 30% of the 2022-2023 crop sold, and at much lower prices, there are increasing concerns that sales won’t be fulfilled as farmers can’t deliver what they don’t have.
Because of this, buyers may look to certified stocks. “Despite prior talk of Brazilian warehouses being full, when I was in Brazil, and I went to try to verify this, I didn’t see where the market ‘talk’ matched the reality. The past large crop was exported and utilized,” said Ganes.
As for how this frost event will impact the global supply/demand balance, most analysts agree it is still too soon to tell, as the extent of the damage has not been properly assessed.
“In 1994, while the loss to that crop as a percentage of the total may be bigger, there was a much greater carry of stocks in Brazil and worldwide. That crop was following a large crop where now the damage comes following a very small harvest and reduced inventories at a time when world demand should be improving as the pandemic eases,” says Ganes. “The only stocks of significance are sitting in Europe but that isn’t enough, in my opinion. Supplies can be tighter than in 2010, 1997, 1994 and 1985. One has to go back to 1975 to find a supply shock as great as this because of the double year production challenges and already spoken for stocks to meet the shortfall in 2021/22, let alone in 2022/23.”
Alexis Rubinstein
© 2020 StoneX Group Inc. All Rights Reserved.
The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI . StoneX is a trading name of StoneX Financial Ltd (“SFL”). SFL is registered in England and Wales, Company No. 5616586. SFL is authorized and regulated by the Financial Conduct Authority [FRN 446717] to provide to professional and eligible customers including: arrangement, execution and, where required, clearing derivative transactions in exchange traded futures and options. SFL is also authorised to engage in the arrangement and execution of transactions in certain OTC products, certain securities trading, precious metals trading and payment services to eligible customers. SFL is authorised & regulated by the Financial Conduct Authority under the Payment Services Regulations 2017 for the provision of payment services. SFL is a category 1 ring-dealing member of the London Metal Exchange. In addition SFL also engages in other physically delivered commodities business and other general business activities which are unregulated and not required to be authorised by the Financial Conduct Authority. StoneX Group Inc. acts as agent for SFL in New York with respect to its payments services business. StoneX APAC Pte. Ltd. acts as agent for SFL in Singapore with respect to its payments services business. ‘StoneX’ is the trade name used by StoneX Group Inc. and all its associated entities and subsidiaries.
Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. Past performance of any futures or option is not indicative of future success. Indicators are not a trading system and are not published as a specific trade recommendation. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.
© 2026 StoneX Group Inc. All Rights Reserved.
