Grappling with a record-breaking dry spell

Rain clouds are finally appearing on the horizon for coffee farmers based in the south-eastern areas of Brazil. After a six week long dry spell, the longest on record in the region, the sight of rain is a welcome relief as the hot summer weather has played havoc with coffee production, forcing exporting levels down by around 30% according to some forecasters which has in turn forced the price of coffee to reach a nine month high.

But this heat wave has gone against the grain of traditional meteorological trends: January tends to be the wettest month for the coffee belt and this change in climate has caught the majority of famers of guard, leaving them with no other choice but to count some hefty financial losses.

‘My grandfather started here [in Sao Paulo state] 80 years ago…[we’ve] never seen a January like this,’ said Marcio Diogo, a coffee farmer based in Espirito Santo do Pinhal, two hours away from the sprawling megalopolis of Sao Paulo.

Neighbouring Sao Paulo state is Minas Gerais, which produces a quarter of all Brazil’s coffee crop and it has been a similar story there: The average amount of rainfall thatplantations get in January ranges between 26.5-30.1cm, dependent upon location; last month they received between 4.5 and 8.6cm, a drop of roughly 75-80%.

The impact is hard to gauge. Lucio Dias, a grower and sales director at one of Brazil’s biggest coffee cooperatives stated ‘there will be losses but nobody knows yet how big [they will be] because this has never happened [before].’ The nation is entering uncharted territory.

Brazil’s coffee belt has suffered from dry weather before, but rarely at this time of year when the Southern Hemisphere’s blisteringly hot summer weather is often offset by monsoon like conditions on an almost daily basis. The normal dry season runs through the months of April to September, but the climate is much, much cooler at that point in the year.

Coffee futures prices in New York started a fraction under $1.12/lb in January and have increased, pushing up to around $1.41/lb. It’s still unclear whether the recent spike in prices, in part driven by Brazil’s drought, will eventually offset the loss in output from the dry weather.