Brazil has experienced a drop in temperature that is threatening its coffee, sugarcane and orange crops. This, as a polar air mass advanced toward the centre-south of the agricultural powerhouse.
The unusually cold weather in the country has led to an uptick in the international price of coffee as well as sugar. The southern-most state of Rio Grande do Sul also reported snow and cold rains in at least 13 cities last week.
The extreme weather has sparked concerns of a weak harvest for Brazil, as the country is known as a major exporter of agricultural commodities.
According to a report by Reuters, Brazilian agricultural federation FAESP in the main sugar belt of Sao Paulo said that frosts have already decimated 15% to 30% of the sugar cane crop.
Indian traders are also reported to have signed sugar export contracts five months ahead of the time as the adverse weather has prompted buyers to secure supplies in advance. This is the first time this has happened in Brazilian agricultural history.
The price of Arabica coffee beans has also shot up to a seven-year high.
Frosts hit crucial crops
Preliminary estimates from the Brazilian government indicate the frosts alone affected 150,000 to 200,000 hectares. This equates to about 11% of the country’s total arabica crop area.
The country’s second corn crop, which makes up 70% to 75% of production in any given year, first suffered from drought before being hit by the frost as harvesting kicked off.
This has alarmed farmers as corn is a key ingredient in livestock feed.
Parana, which is Brazil’s second-biggest grain producer, projected that at least 40% of its corn crop would not be usable. This equates to 6.1 million tonnes of corn.
The state of Parana, Brazil’s number 2 grains producer, cut its projection for the second corn crop by nearly 40% on Thursday to 6.1 million tonnes.
Coffee producers hurt by frosts to get government aid
Coffee producers who have suffered losses due to the frosts could receive 1 billion reais to help bolster their recovery. They will also be eligible to receive additional financing credits from the Coffee Economy Defense Fund (Funcafé) and the National Coffee Council (CNC).
The proposal was approved last week, following a meeting with Brazil’s minister of agriculture, Tereza Cristina.
“We intend to reserve 1 billion reais for this sector, in addition to the 160 million reais already approved,” said CNC president Silas Brasileiro.
“We want to put the funds in the hands of producers as soon as possible,” he added.