The worst drought in 80 years in Brazil has led to daily rationing in smaller cities. The two main reservoirs serving Sao Paulo, South America’s largest city, could dry out by February.
As a result, robusta prices have reached record levels as farmers begin tearing up dead trees. Exports are down 90% during the past 12 months. Reuters reported that production has fallen to 5.95 million bags and that warehouses are letting workers go.
“Damage from the drought appears to be worsening,” according to the report, raising doubts about the 2017 crop. Robusta is favored in the domestic market where shortages are impacting roasters.