The Arabica Challenge – How Weather Can Shake Up Prices?
The world of coffee is facing a period of uncertainty. Extreme weather conditions from the end of August to late September have threatened the Arabica crop in Brazil, the world’s largest coffee producer. Mintec’s Tropical Research Services explore how recent extreme weather in Brazil could potentially impact coffee prices.
Arabica's Temperature Sensitivity
Arabica coffee is highly sensitivity to temperatures above 34°C, a threshold at which flowers are at risk of abortion, reducing potential crop yield.
Events in September, where Mintec’s Tropical Research Services conducted a field survey mid-September, brought to light the adverse impact of hot and dry weather conditions that followed unseasonal rains in late August, particularly in Brazil's South of Minas region.
“Soil moisture is low due to the combination of low rainfall and high temperatures. This is having a negative impact on the cherry set and general tree conditions, with above average levels of de-foliation” comments Steve Wateridge in the TRS September Coffee Review.
These climatic challenges took a toll on the flowering and cherry set during the crucial first flowering round.
Positive Weather Trends and Arabica's Recovery
Despite the initial concerns, there is reason for optimism as the weather has improved recently, bringing relief to Arabica coffee producers.
“Temperatures continue to fall around arabica regions, remaining below the critical level. The current weather forecast points to temperatures below critical levels in the next 15 days.”
Significant rains were recorded in late September in key coffee-producing regions, including São Paulo, Cerrado Mineiro, and the South of Minas. These cumulative rains provided the necessary conditions for a second round.
“The rainfall last week should trigger another flowering round - the second - in South of Minas, São Paulo, and Cerrado Mineiro regions, with an expected intensity between 20% and 30% of the productive potential of the 2024/25 season.”
Looking forward to October, the cumulative rainfall forecast for the first 15 days appears promising, surpassing the minimum requirements for proper flower and cherry development.
“A minimum rainfall of 100 mm in October is required for proper development of flowers and cherries” and this threshold is expected to be met or exceeded in the coming month. Additionally, temperature levels are expected to remain favorable, providing further support for Arabica coffee cultivation.
As a consequence of these findings, Mintec’s Tropical Research Services have adjusted downward their 2024/25 Arabica production forecast, and the overall forecast for total coffee production in 2024/25.
“There is still a risk that the high temperatures towards the end of September may have damaged the bud flowers that will produce the second round of flowering for the 2024/25 crop, but whether or not this is the case will only become apparent in the second half of October”, adds Steve Wateridge.
To explore the supply & demand dynamics, and unlock production forecasts giving you competitive edge in coffee markets, get in touch with Mintec's Tropical Research Services experts at info@tropicalresearchservices.com.
