Shortage of coffee in 2021 might see record prices

Brazil coffee shortage 2021
  • Some of the most significant coffee-producing regions got less than half of the average amount of rain. Brazil is the world’s largest exporter of coffee.
  • The rainy season in Brazil often occurs during the northern hemisphere’s winter, giving enough water for farmers to irrigate coffee plants and keep them alive for several months.

Bloomberg reported this week that Brazil’s rainy season suffered a severe shortage of rain. Some of the most important coffee-producing regions received less than half the typical quantity of rain. As a result, “output of arabica coffee, the high-end kind preferred by chains like Starbucks Corp., is also decreasing significantly,” according to the study. Brazil is the world’s largest coffee exporter.

The rainy season in Brazil usually happens during the winter in the northern hemisphere, providing enough water for farmers to irrigate coffee plantations and keep them alive for several months. However, some Brazilian coffee farmers in the country’s central and southern regions claim they’ve already depleted the water source that typically keeps their crops moist until September, and they’re worried that their soils won’t be able to hold enough water for the coming season.

According to Bloomberg, coffee benchmarks have hit their highest level in four years in terms of exporting costs. This might result in significantly higher costs for both merchants and customers, as well as a probable scarcity of our favorite arabica coffee.

Coffee prices in Brazil have increased from 400 reais ($77.30) per 60kg bag in December to about 800 reais ($154) this month, with additional rises expected to reach above 1,000 reais ($192.59) in the coming months.

Here is a video from The Ninja Economist that gives an excellent overview about the shortage:

Related posts

Leave a Comment