Everstream Analytics Reports Coffee Supply Chain Threats
The global coffee industry has faced significant challenges in recent years due to extreme weather events, with the 2023-2024 season proving particularly difficult.
According to Everstream Analytics, the supply chain risk management company, adverse conditions have affected major producing regions, leading to concerns about supply and price stability.
Brazil, the world's largest coffee producer, is entering a critical period for its upcoming crop. The country's coffee belt has experienced a severe lack of rainfall through September, raising alarms about potential yield impacts.
Meteorologists, including Jon Davis, Chief Meteorologist at Everstream Analytics, have been tracking the coffee supply chain and are closely monitoring forecasts for the next six weeks, as continued dry weather could affect global coffee supply chains.
We take a look at Davis’s insights on the ground as he tracks the coffee supply chain impacts from severe weather.
Impacts on the Coffee supply chain across the world
“It has been a tough year for coffee”, Davis reports.
“Brazil is by far the largest coffee producer in the world accounting for one-third of global production.
“The new crop will start to develop during the September/October period which corresponds to the onset of the rainy season in the southeast portion of the country.”
“It is the dry season in Brazil but extreme and unusual heat this winter has reduced soil moisture reserves to dangerously low levels”, he adds.
This situation in Brazil compounds existing issues in other key producing nations.
Colombia, for instance, has seen production decline due to excessive rainfall, while Uganda and Côte d'Ivoire have grappled with drought conditions.
“Poor weather impacted coffee crops in Vietnam and Indonesia earlier this year”, Davis continues.
“Heat and dryness in Vietnam stressed the trees and led to a reduced crop. The conditions earlier this year were driven by the El Niño event that was in place late last year and during the first 3-4 months of 2024.”
El Niño is a climate phenomenon characterised by the unusual warming of surface waters in the eastern tropical Pacific Ocean, significantly impacting global weather patterns.
It influences rainfall, temperature, and storm activity worldwide, often resulting in extreme weather events such as droughts and floods.
“Vietnam is the second largest producer of coffee in the world” Davis comments, whilst in Indonesia, the 4th largest global producer, “heavy rains during maturation and harvest of the most recent crop impacted both production and quality.”
Forecast of the global coffee supply chain
These weather-related challenges have led to reduced outputs and quality concerns across multiple origins.
Davis reports that recently: “soil moisture reserves in the coffee belt are the second lowest since 2003.
“Soil moisture reserves in 2021 were slightly lower than the current level. The lack of moisture is starting to stress the trees as the spring growing season approaches.”
He continues: “The critical period will be later in September and October when the trees flower and the “new crop” begins to develop.
“Significant rains will be needed to replenish soil moisture reserves and allow the trees to have ample moisture to develop the new crop.”
Overall, Davis believes that rainfall prospects in the coffee belt will be nonexistent going into the early portion of September, with no improvement expected during the first half.
“If the dry weather continues”, Davis says, “the new crop will be impacted during the yield-sensitive flowering stage. Thus, the next 6 weeks are a critical period for the world’s largest coffee producer.”
As extreme weather events become more frequent, the coffee industry's vulnerability to climate volatility underscores the need for robust risk management strategies and increased investment in resilient agricultural practices.
--------------
Make sure you check out the latest news at Food Digital, a BizClik brand