According to The Wall Street Journal (WSJ), a poor harvest in Brazil, the world's largest supplier of coffee beans, can make a cup of this drink even more expensive. In 2021, coffee plantations endured drought and then frost. This year, producers expect their crop of arabica coffee beans to decline by half, WSJ reports. Brazil’s crop failure could exacerbate an international supply shortage and drive the cost of the commodity higher. Thiago Cazarini, a Brazil-based coffee broker at Cazarini Trading Co., is sure that global arabica prices will rise considerably in 2022. Members of the Minasul coffee cooperative fear that the supply will drop by more than 50% this year. The company expects to receive less than a million bags of coffee compared to 2.2 million in 2020. At the moment, global coffee demand exceeds supply. According to Fitch Solutions, coffee stocks in Intercontinental Exchange warehouses are at their lowest level this century. Coffee futures surged in 2021 and in early 2022 and reached a 10-year high of $2.58 a pound. Later, prices declined to $2.23 a pound but remained well above the levels recorded in recent years. In the summer of 2021, arabica coffee futures on the Intercontinental Exchange went above $2 a pound (0.45 kg) for the first time since October 2014. The surge was caused by fears that commodity production could decrease. A price spike was preceded by abnormally cold weather in Brazil’s largest coffee-growing states: the states of Paraná, Minas Gerais, and São Paulo. Last November, coffee futures contracts for December delivery hit $2.33 a pound, their highest level since November 2011.
