Brazilian drought leaves coffee crop high and dry

Growers say output will drop to a four-year low

By CARLOS CAMINADA
Bloomberg News

Brazilian coffee grower Joaquim Jose de Oliveira won't be bringing his full harvest to market this year. Drought that has weakened next season's crop is forcing him to husband this season's.

"I'm only selling enough to keep going," Oliveira said. "Otherwise, next year I'll have almost nothing to sell."

October rains came too late for trees in the prime coffee-growing region to recover from the driest winter in two decades. Few plants have flowered properly, meaning next season's harvest will be meager.

Forecasters say output in the world's largest coffee-producing nation will fall to a four-year low. That has pushed up futures prices by 10 percent in the past month to $1.2265 a pound on the New York Board of Trade. Prices may rise to as much as $1.35 a pound in coming months as farmers like Oliveira hold back supplies, coffee trader John Wolthers said.

More...