Coffee prices and related exchange traded note perked up Thursday as Brazilian farmers grow increasingly worried over the prospects of a record robust-coffee harvest in face of blazing heat withering the crops.
The iPath Series B Bloomberg Coffee Subindex Total Return ETN (NYSEArca: JO) increased 3.9% on Thursday while ICE coffee futures rose 3.7% to $1.0590 per pound.
Robust beans, which are used in instant coffee and espresso, are suffering under unrelenting heat across Espirto Santo and Bahia, Brazil as average temperatures this month are as many as 8 degrees Celsius, or 14 degrees Fahrenheit, above the average in the main producing states, Bloomberg reports.
“Beans are being burned amid scorching conditions and lack of rain,” Edimilson Calegari, general manager at Brazil’s top robusta cooperative Cooabriel, told Bloomberg.
Calegari warned that under the back-to-back heatwave, the coffee cherry exposed to the sun has dehydrated, preventing the beans from maturing properly. A meteorologist at Somar in Sao Paulo pointed out that plants full of developing cherries have been seeing as much as nine hours a day of temperatures above 30 degrees Celsius, with temperatures reaching as high as 37 degrees.