BRAZIL
Brazil’s ongoing drought is sending ripple effects through the robusta supply chain. As inventories decrease, warehouse employees are facing layoffs.
"Warehouses and segments of the coffee industry here are putting employees on leave and transferring some to other areas," Luis Polese, president of coffee trade association Sindicafe, told Reuters news service. "Unfortunately, less skilled workers are being let go."
The association doesn’t have an exact count of how many workers have lost their jobs but the association reports robusta exports are down 90% over the past 12 months compared to the previous year.
Prices remain high, demanding US $132 to $134 per bag for conilon, a name given the varieties of robusta grown in Brazil. Producers anticipate another bad crop in 2017 as trees damaged by drought are removed.
At current prices, Brazil's 2016 robusta crop is worth $1.2 billion. Conilon makes up about a quarter of Brazil's coffee crop and is the staple coffee consumed on the domestic market, which is second only in size to the United States.