STiR Tea & Coffee Industry International

Volume 5, Number 6

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44 STiR coffee and tea / Issue 6, 2016 (December/January) SÃO PAULO, Brazil A prolonged drought in Brazil has cut the robusta crop by 25%, shifted production away from the traditional growing regions and resulted in government fines for farm- ers who are prohibited from using water stored on their own land to revive crops. Reservoirs are at an all-time low and the water is desperately needed by residents. As a result the International Coffee Organization (ICO) reported that robusta prices rose significantly in October reaching a 21-month high of $1.42 per pound. Locally prices on Brazil's (CEPEA/ESALQ) Index rose to a record $1.69 per bag on Oct. 31. "Total coffee exports ended 2015/16 down by .7% to 112 million (60-kilo) bags… with robusta declining by 3 million bags," according to ICO, "(robusta) exports amounted to 40.8 million bags compared to 43.8 million bags the previous year." "The coffee market ended in a deficit for the second consecutive year, (down 3.3 million bags) but stocks accumulated in 2012/13 and 2013/14 have allowed the market to remain well supplied," according to ICO. Global production was 148 million bags. Brazil's CONAB (National Company for Food Supply) estimates Brazil's robusta crop declined to 8 million bags, a staggering 22.2% below the previous year. These are strange days for those who work in the coffee industry, especially those who produce coffea canephora. For the first time in history, speculators drove robusta prices briefly above arabica in the Brazilian market due to shortfalls caused by droughts in the main producing areas in Brazil. "In 15 years producing conilon (robusta) in Espírito Santo, this is the first time that I have seen robusta's prices reach the price of arabica!" exclaims Esthério Colnago, president of the Brazilian Sindicate and Cooperatives Organizations of Espírito Santo (OCB/ES). Together the states of Espírito Santo, Rondonia, and Bahia normally produce 94% of Brazil's robusta but these numbers changed drastically due to a severe lack of rain for two years in a row, according to Esthério. "We are able to produce an average of 12 – 15 million bags per year, but this lack of water destroyed more than 30% of our crops," he says sadly. "It was so serious that local governments prohibited farmers from using their stored water or personal water sources to irrigate their crops. Those who ignored the temporary law would pay heavy fines," he explained. Drought resistant varietals and new farming techniques could revive robusta production. Shortfall of Brazilian Robusta Shakes World Market Solubles manufacturers in the world's largest robusta producing country may be forced to import coffee By Kelly Stein Photo courtesy INCAPER "Robusta prices briefly surpassed arabica for the first time in history."

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