Companhia Nacional de Abastecimento (Conab), the\u00a0government’s food supply and statistics agency, said total coffee output would plunge 22.6% in 2021, to an expected 48.8 million 60-kilo bag.<\/p>\n
Conab forecasts an output of 33.36 million bags of Arabica this season and 15.44 million of Robusta.<\/p>\n
There are two main species of coffee: Arabica and Robusta. Starbucks purchases only Arabica beans cultivated at high altitudes. About 70% of the world’s Arabica beans are grown in Brazil. Starbucks, and many other coffee chains, could soon feel the burn as wholesale price increases will likely be passed onto consumers.<\/p>\n We’ve already mentioned coffee shortages are\u00a0brewing<\/a>\u00a0as global supplies are shifting into a deficit as drought in Brazil slashes output. This has resulted in surging wholesale prices and US supplies slumping to a six-year low. Savor today’s cheap cup of joe because retail prices will rise.<\/p>\n More on the drought and how crop and food prices are skyrocketing to multi-year highs, and the culprit is likely due to\u00a0La Nina<\/a>, a weather pattern characterized by the cooling of the equatorial Pacific that triggers atmospheric shifts and causes droughts in some regions of the world and wetter conditions in others.<\/p>\n Brazil has been devastated by drought during its traditional rainy season.<\/p>\n ICE Coffee futures for Arabica coffee have soared to multi-year highs on output declines in South America.<\/p>\n Meanwhile, La Nina has disrupted weather patterns worldwide, leading to terrible droughts in South and\u00a0North America<\/a>. Consequently, food prices have soared to the highest levels in a\u00a0decade<\/a>.<\/p>\n As much as the Federal Reserve expects “transitory<\/a>” inflation – La Nina altering weather patterns could exacerbate food inflation and create years of elevated\u00a0crop and food prices.<\/em><\/p>\n![\"\"](\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/brazil.jpg?itok=9yyzwhae\")
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