TRS: Maximum 3.5 Million Bags of Coffee Lost as Result of July’s Brazilian Frost
CoffeeNetwork (New York) – In a webinar presented by the InterContinental Exchange (ICE) titled Caffeine high: severe frosts prompt fears of shortages, Steve Wateridge, Global Head of Research, Tropical Research Services (TRS), classified the most recent frost events in Brazil as “moderate.”
According to TRS analysis, the affected area from the frost on 20th July was approximately 170,000 hectares, amounting to 6% of the total crop area. “If all of that area was completely lost, assuming productivity is about 20 bags/hectare, this would mean maximum damage will be 3.5 million bags,” he said.
However, Wateridge explained that if a farmer prunes the coffee trees that suffered light damage, 80-90% of productive potential from those trees could be salvaged. “With the prices so high, there is incentive now to do a light pruning and retrieve that production.”
Despite the media frenzy regarding the severity of the frost and its consequential impact to Brazil’s coffee crop, TRS believes that the damage was relatively small when compared to the losses that had already occurred as a result of the 12-month drought that took place prior. Wateridge estimated that 7 million bags were already lost due to the late start of rains for 2021-2022. Relatively dry weather also stunted the branch growth for the 2022-2023 crop. Losses from this plus those from the frost could amount to up to 9 million bags of lost production for the 2022/23 crop.
Impact on Global Balance Sheet
In Brazil, coffee farmers are receiving record prices, so this will most likely allow them to maximize yields for the new crop.
In Vietnam, farmers went from making below the cost of production to now, making a profit. Farmers are once again maximizing fertilizer use. “If price levels are sustained through the harvest from September-December, this could have a positive impact on the 2022-2023 crop,” Wateridge explained.
For Colombia, the main harvest is about to begin. Wateridge noted that given the level of farm care that current prices could instill, 2022-2023 and 2023-2024 could see production of more than 15 million bags.
Alexis Rubinstein
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