Starting the day with a wholesome mug of brewed coffee feels no less like heaven. But, now your cup of coffee and the health benefits of coffee may cost you a few more extra dollars. This is because Brazil has witnessed the worst drought of the century resulting in a global shortage.
Moreover, the drought has turned out to be a nightmare for the coffee industry. The stockpiles have sunk to a six-year low, and the reasons lie much beyond the rising temperature.
Under the coffee bushes, harvesters are scraping through a litter of dead leaves and dried mud in search of stray coffee berries. Some of these harvesters say “it’s the beginning of the hungry season”, but why exactly are coffee plants unable to flourish and blossom?
Impact Of Climate Change On Coffee Cultivation
Coffee cultivation completely depends on four growth conditions – Soil, Topography, Shade, and Climate. Being a tropical plant, coffee requires abundant rainfall, humidity, and heat to grow well.
Arabica and Robusta are two coffee beans that are highly consumed across the world. Likewise, both types of coffee beans are highly vulnerable to climatic changes.
As compared to Robusta beans, Arabica produces a higher quality taste and is notably sensitive too. It requires 18 to 21 degrees Celsius, followed by a definite number of warm days, cool nights, and abundant rainfall.
Fast forward in Colombia, regions like Zona Cafetera have pushed farmers to grow beans at higher elevations offering all the above climatic conditions.
Moving operations have always been a matter of concern for Colombian farmers. The effects of climate change are visibly seen now. And thus, the drought made the situation worse leading to a full-blown coffee shortage.
A Brief History Of Coffee Cultivation In South America
Brewing in numbers, the US is the second-largest exporter of coffee in the world. Coffee beans came into the limelight in the 17th century, the success was both immediate and skyrocketing. During that century, people started to plant beans at every colonial outpost because of the growing demand.
In the 18th century, the growth and exportation of coffee beans increased in South American countries. And by the early 20th century, Costa Rica, Colombia, and Brazil were the only top exporters of coffee beans.
The last coffee crisis coffee admirers faced was back in 2009, popularly called the Colombian Coffee crisis. It was caused by the coffee leaf rust disease and extreme climatic conditions too.
This year, the drought just arrived when the coffee crop was entering the low point of the natural biennial cycle. Many areas have seen 100% to 50% losses. Brazilian farmers admit that they have never seen a drought as bad as this one for over a decade now!
Brazil is the largest producer and exporter of Arabica coffee beans. The La Nina weather pattern has taken a toll on several South American crops including Arabica beans.
Roughly the production of coffee beans went down between 21.4% to 30.5% from the last year. The drought turned out to be so intensive that the uncertainty is visible in both local and global markets.
Supply Chain Disruptions Due To Covid 19
The cargo market disruption has already worsened the food export segment. Additionally, the pandemic has hit farmers with more issues like high labor and low coffee prices.
Labor shortages have always been a matter of concern in the coffee industry because pickers often come from different regions and fail to adhere to sanitary conditions.
Since many businesses are operating under older contracts, the market hasn’t seen much disruption yet. But the prediction determines a tremendous increase in price from the next contract batches, both because of logistics and drought conditions in South America.
Outlook For The Rest Of The Year!
Potential losses because of the drought may persist throughout 2021. The drought might even affect half of the yields of the coming year too. Still, the ever-evolving technology might come as a rescue to this issue. World coffee consumption is growing year over year, and for the last five years, the growth trajectory is 2%.
Thus because of the increasing consumption, the price is more likely to increase in the near future. Countries like the US, Germany, and Italy are already paying a higher cost. We can call this a global coffee shortage horizon as of now, but if the demand keeps on increasing the same way, the crisis may stay for years!