Kenyan coffee farmers may be set for an earnings boom following a major crop failure in Brazil, the world’s leading producer.
Market analysts project a sharp rise in the global prices of coffee after extreme weather conditions impacted the crop in Brazil amid projections that the South American nation will produce 35.7 million crop bags the year starting July — nearly 27 per cent lower than its record output two years ago.
“It goes without saying that the disrupted crop will translate to gains for Kenya in terms of higher prices,” Mr Daniel Mbithi, the chief executive officer of the Nairobi Coffee Exchange, told Sunday Business.
Brazil experienced bad weather last year after being hit by both drought and frost. Earlier in 2020, Brazil had produced a record 48.7 million crop bags.
Severe frosts in July damaged a large part of fields in the main Brazilian coffee belt, sending prices of Arabica rising by up to 20 per cent — the highest in nearly seven years.
For instance, arabica futures prices for September hit $2.15 per kilo, the highest for the front month since October 2014.
The high prices are expected to prevail in the medium-term on the suppressed Brazilian crop, translating to better earnings for Kenyan producers.
