What Do Brazil's Drought and Fires Mean for Coffee Trees?

Brazil is in its worst drought since records began in 1950, with about 58% of its land affected, roughly 5 million square kilometers. Fires have hit São Paulo and Minas Gerais, where coffee trees are flowering, and the dry, windy conditions may cut next season's harvest. International coffee prices remain high as a result.

Brazil's National Institute for Space Research recorded 68,635 fires in August, the most for that month since 2010, including 3,175 in São Paulo state, where over 80,000 hectares of crops burned. Domestic robusta spot prices have passed arabica for the first time, and effective rainfall may not arrive before mid-September, keeping pressure on the market.

Brazil is experiencing its worst drought since records began in 1950, with nearly 60% of the country affected, forest fires occurring frequently in many places, and major coffee-producing regions such as São Paulo and Minas Gerais suffering severe damage. Coffee trees are in the flowering stage, and the drought and fires have worsened unfavorable growing conditions, potentially leading to a reduced harvest in next year's new crop season. At the same time, domestic Brazilian robusta spot prices have surpassed arabica, and international coffee prices remain high. This article will analyze in detail the impact of the drought and fires on Brazil's coffee industry and global prices.

According to Brazilian media reports, data recently released by Brazil's National Center for Monitoring and Early Warning of Natural Disasters (Cemaden) shows that Brazil is facing its worst drought since records began in 1950, with nearly 60% of the country's land area affected by drought, and effective rainfall may not occur until mid-September at the earliest.

It is said that Cemaden's index for measuring drought severity is the Standardized Precipitation Evapotranspiration Index (SPEI), calculated from rainfall and the amount of water evaporated and transpired by plants. The data shows that Brazil's recent drought severity has exceeded the severe droughts of 1998 and 2015-2016. The drought problem has already affected more than 5 million square kilometers of land across Brazil, accounting for 58% of the country's land area.

In addition, in recent times, rainfall in Brazil has continued to be low, and the country has experienced fires and poor air quality. Earlier, Brazilian media reported that the number of forest fires has increased abnormally this year. According to data from Brazil's National Institute for Space Research, 68,635 fires were recorded nationwide in August, the highest for the same period since 2010. The most severe was in the Amazon rainforest region, where 38,266 fires were recorded in August.

Next is São Paulo state, where 3,175 fires were recorded in August, with multiple cities entering a state of emergency. The fires mainly occurred in rural areas of São Paulo state, severely affecting the state's agricultural production activities. The fires destroyed native vegetation and burned more than 80,000 hectares of crops, including sugarcane fields and coffee estates, and caused damage to many agricultural facilities and rural farmhouses. It is estimated that the fires have caused more than 1 billion reais in losses to agricultural production.

By September, most of the fires in São Paulo state had been extinguished, but according to a report from the São Paulo state Civil Defense Department, 9 cities in São Paulo state still have active fire points. These fire points are distributed in areas such as Ribeirão Preto, Campinas, Bauru, Marília, and Vale do Paraíba, causing damage to surrounding farmland, forests, and protected areas, and may also affect water sources.

In addition, Cemaden's report also pointed out that about 3,978 cities in Brazil are currently facing varying degrees of drought, of which 201 cities are in a state of extreme drought, the highest number on record. The regions with the most cities in extreme drought include São Paulo state (82 cities) and Minas Gerais state (52 cities), and this number of cities showed an upward trend in early September and may exceed more than 4,500.

The drought and lack of rainfall have also affected local soil. According to data, the average soil moisture in Brazil from May to July was 66.10 millimeters lower than the same period last year. São Paulo state, Minas Gerais state, Goiás state, and the Federal District, where Brazil's capital is located, entered a red emergency state because humidity was below 12%. In addition, multiple areas with relative humidity below 30% entered orange or yellow emergency states, and the recent drought and fires will worsen this situation.

The thick smoke brought by the fires has intensified air pollution. According to monitoring data, the level of air pollution in Minas Gerais is about 10 times higher than World Health Organization (WHO) standards. Air pollution can also affect plant photosynthesis to a certain extent, affecting growth, and ultimately leading to quality decline and reduced production.

It is understood that São Paulo state and Minas Gerais state are both major agricultural and livestock production areas in Brazil and are rich in coffee. Minas Gerais alone accounts for 30% of the country's coffee production. At present, Brazilian coffee trees are in the flowering period. The lack of rainfall and the very dry and drought-stricken weather conditions are unfavorable for growth. At the same time, there are concerns that the La Niña weather expected at the end of the year will intensify the climate impact. This situation will affect Brazil's coffee production in next year's new crop season.

Moreover, Brazil is the world's largest coffee producer. At present, Brazil's domestic robusta spot price in August was 1,483.95 reais per bag, having risen by 16.73% cumulatively, and surpassing the arabica spot price. In August, Brazil's arabica price was 1,448.24 reais per bag. International robusta prices have also reached US$5,340 per ton, while international arabica prices are at 296.5 cents per pound. The current unfavorable climate conditions are keeping domestic Brazilian and international coffee prices high, and may even push prices further up.

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The above content is compiled by CoffeeHunters, a coffee news website.