The price of coffee surged to the highest levels for months due to a dry weather in Brazil, the world’s largest exporter of coffee beans. High temperatures and low rainfall (the least amount of rain in the past twenty years) are threatening the coffee crop and could disrupt the economy. The current dryness in Brazil comes at a crucial time for the development of the coffee crop and has already prompted traders to pare back their outlook for this year’s crop. Although the government has not taken extreme measures, a campaign asking citizens to use less water has been started. If the dry weather continues, Brazil’s energy supply could also be affected.
Correspondent Paul Cabral reports from Sao Paulo, one of the regions hit hardest by the drought.
Another major coffee producer, Vietnam, is suffering a drought, and US coffee drinkers may have to brace themselves for another kind of jolt, as some experts are predicting a big spike in coffee prices.
Correspondent Chris Casquejo visits Seattle, where coffee prices are expected to start climbing.
The increase in price is also the highest price for coffee since last May. In fact, coffee prices have climbed 29% and they could go even higher. Analyst says coffee could jump to $2 per pound if current weather conditions continue.
President of Hackett Financial Advisors, Shawn Hackett discusses the recent changes in coffee prices internationally and how this is affecting its supply and demand.