The coldest temperatures in Brazil in six years gave traders a scare in July when a polar air mass covered 25% of the country’s coffee-growing regions.
Prices on commodity markets firmed on news of the unusual frost but soon settled back to lows not experienced in decades. Growers in São Paulo state reported the frost was not severe enough to fracture bark but caused extensive damage to leaves which weaken the plant’s resistance to disease. A sustained “black frost” kills trees.
Prices during the past quarter that fell as low as $0.88 per pound, spiked briefly to $1.16 per pound, according to ICE Futures data.
The International Coffee Organization composite indicator reached $1.07 in June 2019, averaging $0.99 per pound, up for the first time since January. Exports increased by 7.5% since October 2018.