Brazil’s Government Fears Bigger Coffee Losses From Frost Blow
(Bloomberg) -- Government officials in Brazil are bracing for coffee crop losses that amount to more than a third of what Americans drink in a year after a heavy frost ravaged fields in the world’s biggest producer.
That’s according to a preliminary assessment by the Brazilian government, which is expecting a hit of anywhere from 5 million bags to 10 million bags, or as much as 600 million kilograms (1.3 billion pounds) destroyed, said a government official who asked not to be identified because the data is not formal and is only being circulated internally. The highest estimate among analysts previously compiled by Bloomberg was 8.8 million bags.
Powerful frosts in Brazil have devastated arabica-coffee trees in recent months that were already stressed by the driest weather in nearly a century. The weather woes in the mega-supplier have pushed up futures prices in New York by 56% in the past year. Consumers have already seen rises in retail prices for their mornings cups of coffee, and the crop damage in Brazil means more hikes are likely on the way, adding to broader concerns about food inflation.
The government is still assessing damage, and once that’s finished in the coming weeks, an official estimate will be released, the person said. Brazil’s Agriculture Ministry didn’t immediately respond to a request for comment.
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