March 6, 2014
Marvin G. Perez – Bloomberg, 3/5/2014
Coffee futures topped $2 a pound in a surge to a 24-month high as drought conditions that started in January eroded prospects for crops in Brazil, the world’s top producer and exporter.
Rain will ebb after a cold front this week in Brazil’s coffee areas, Somar Meteorologia inSao Paulo said yesterday. The southeast including Minas Gerais, the top producing state, is having the driest summer since 1972, the National Institute of Meteorology in Brasilia has said. Wolthers Douque, a U.S. import company, cut its crop forecast this year by 10 percent.
Futures for arabica beans, favored by specialty companies such as Starbucks Corp. (SBUX), have surged 83 percent this year, the most among the 24 raw materials tracked by the Standard & Poor’s GSCI Spot Index. Last year, coffee tumbled 23 percent in the third straight annual loss, the longest slump since 1993, amid Brazil’s bumper crops.
March 5, 2014
Alexandra Wexler, Jeffrey T. Lewis & Leslie Josephs – The Wall Street Journal, 3/4/2014
Brazil’s worst drought in decades is decimating crops but breathing new life into battered commodity markets.
It hardly has rained in some of the South American country’s top farming regions since the start of the year, a period when precipitation is usually the heaviest. Traders, analysts and government forecasters who were calling for record harvests in coffee, sugar and soybeans as recently as December are cutting production estimates, triggering a spike in futures prices that may translate into higher costs for consumers later in the year.
Futures prices for the arabica coffee variety are up 67% since the start of the year. Raw-sugar prices have risen 8%. Soybeans, which have been affected by drought in some areas and too much rain in others, also are up 8%.
March 3, 2014
Kenneth Rapoza – Forbes, 3/3/2014
Drought in the center-south and heavy rains in the center west bread basket states of Brazil have taken a massive toll on the country’s all-important farm sector. According to agribusiness analysts, the country will lose at least R$10 billion (around $4.35 billion) in farm revenues this year because of the odd weather patterns.
The smaller than expected crops, while not an entire disaster, has an impact on the country’s inflation. Brazil’s inflation rate is around 5.6% currently and any increase would force the Central Bank to rethink monetary policy.
Major cash crops such as coffee, soy, citrus, sugarcane and even beef cattle ranching have been impacted by the excessive weather. Brazil is the world’s largest producer of all of the above except for soybeans, in which Brazil is second to the U.S.
February 28, 2014
Sergio Fausto, O Estado de S. Paulo, 2/28/2014
Challenges abound for the next presidential term. There are several symptoms indicating that the “new development model,” the “new paradigm of the political economy,” or all the other pompous names one wishes to assign to the policies of the current government, have not produced the expected results. There is a widespread feeling both here and abroad that we are improvising and kicking the can down the road. For how long will this last?
Given this situation, the following question is raised: Will the candidates for the Presidency present political platforms that allow the voter to understand their vision with regards to these challenges and learn about the political choices each one intends to make to address them? Or will we once again watch, as per the norm in recent disputes, a campaign devoid of programmatic content, reduced to propaganda based on real or alleged personal positive attributes of the candidates and vague proposals of distributing more benefits (fancifully without costs and without sacrificing any other desirable goal)?
It is true that political platforms must be translated into more accessible language to ordinary voters, and that in order for a campaign to be successful, it must mobilize feelings around a simplified driving idea. Or such is the conventional political wisdom in Brazil. This notion, however, not only inhibits voters from being more informed, but also weakens the mandate of the government elected by the voters.
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February 27, 2014
Samantha Pearson & Emiko Terazono – The Financial Times, 2/27/2014
Forecast rain may pour cold water on Brazil’s Carnival festivities in the next few days, but the country’s farmers are looking forward to getting a drenching.
After a January that ranked as one of the hottest and driest on record, heavy rains expected across the south of the country will be a welcome relief for the region’s farmers.
Panic has spread across global agricultural markets over the past few weeks as Brazil’s January drought ravaged crops in the country that is the world’s top producer of coffee, sugar and orange juice, and a big supplier of grains such as soyabeans and corn.
February 25, 2014
Jia Lynn Yang – The Washington Post, 2/25/2014
Don’t panic. But there could be a global coffee shortage. Usually, during this time of year, the delicate arabica coffee plants in the mountains of Brazil, where most of the world’s coffee comes from, are maturing. White, fragrant flowers have appeared, followed by cherrylike fruit, each containing two seeds: arabica coffee beans, the most popular in the world.
But last month the worst drought in decades hit Brazil’s coffee belt region, destroying crop yields and causing the price of coffee to shoot up more than 50% so far this year. The drought is historic, forcing more than 140 cities in Brazil to ration water. Newspapers reported that some districts are receivingwater only every three days.
For now, retail prices for coffee are stable. Roasters typically have enough supplies to cover themselves for a few months. But if the price of the arabica beans continues to rise, consumers could start seeing the cost of their morning coffee creep up later this year, according to Jack Scoville, a futures market analyst specialising in grains and coffee, among other commodities. Last Wednesday the price per pound (0.45kg) of coffee for delivery due in March reached the highest point in about 14 months, at $1.72.
February 24, 2014
Lourdes Garcia-Navarro – NPR, 2/23/2014
Brazil, a country usually known for its rainforests, has been facing a severe drought in its breadbasket region, leaving people in the cities without water and farmers in the countryside with dying crops. Global prices for coffee, in particular, have been affected.
Scientists in Brazil say the worst is yet to come — yet no one in the government, it seems, is listening.
On a recent day, farmer Juliano Jose Polidor walks through the desiccated remains of his cornfields.
What’s happened to this crop, he says, is a total loss.
February 20, 2014
Keith Johnson – Foreign Policy, 2/19/2014
Brazil, the old joke goes, is the country of the future — and always will be. Unfortunately, when it comes to fulfilling the promise of the country’s rich energy resources, the joke rings only too true.
Brazil’s transformation into an energy powerhouse, seemingly so close just a few years ago, has been hobbled by politics. The country’s ability to take advantage of massive offshore oil resources is increasingly questioned, its once-vaunted biofuels industry is reeling, and there are even concerns this year about keeping the lights on and power companies solvent.
There are plenty of things to blame for the hiccups, starting with a severe drought that has hamstrung Brazil’s ability to generate electricity from hydroelectric power, which in turn as led to a spike in fuel imports to run other power plants.
February 18, 2014
Lunae Parracho & Caroline Stauffer- Reuters, 2/17/2014
As Brazil struggles to solve land disputes between Indians and farmers on the expanding frontier of its agricultural heartland, more tensions over forest and mineral resources are brewing in the remote Amazon.
The government of President Dilma Rousseff gave eviction notices to hundreds of non-Indian families in the Awá-Guajá reserve in Maranhão state in January and plans to relocate them by April, with the help of the army if necessary, Indian affairs agency Funai says.
The court order to clear the Awá territory follows the forced removal of some 7,000 soy farmers and cattle ranchers from the Marãiwatsédé Xavante reservation last year, a process profiled by Reuters that resulted in violent clashes.