Brazil has curbed coffee exports, one of its main source of foreign exchange, after severs frosts his various coffee-growing areas in the south in August.
SV ZOOM OUT FROM Coffee workers walking through crops
SV Man picks coffee twig affected by frost PAN UP coffee plant stripped of its leaves (2 shots)
SV PAN OVER Coffee pickers picking coffee and sifting beans (2 shots)
CU Carving showing woman tossing coffee beans and coffee beans being tipped from sacks into coffee roasting machines (4 shots)
CU PAN DOWN Sacks of coffee ready for export
Script is copyright Reuters Limited. All rights reserved
Background: Brazil has curbed coffee exports, one of its main source of foreign exchange, after severs frosts his various coffee-growing areas in the south in August. At risk is Brazil's1979/80 coffee crop. Most of this year's crop has already been harvested. Meanwhile in coffee markets around the world fears are held that any shortfall in Brazilian production could have a dramatic impact on world coffee prices.
SYNOPSIS: The bad news came about a fortnight ago, the President of the Brazilian Coffee Institute announced that there was a very serious danger of frost in one of the major coffee-growing areas. The next day coffee export licences were suspended when the prediction came true.
In late July, temperatures in Brazil's coffee-growing areas were above normal, and coffee's future prices on the London market foll to a two-year record low. But with news of the frosts.... coffee prices in London shot up instantly by four hundred dollars a ton. There were fears that coffee prices would skyrocket even more.
It has not been a good year for Brazilian coffee. The southern state of Parana had a long, dry summer, and while the drought improved the quality of the beans grown there, it cut down their quantity.
Most of this year's crop was already in when the frost hit in mid-August and it has begun to look as though the frost will have only relatively minor effects on next years's harvest. At first, the Brazilian Coffee Institute predicted the Brazilian Coffee Institute predicted the cold snap would result in the loss of more than eight million bags of coffee...more than a third of the expected national harvest. However London dealers were figuring privately that the Brazilian estimate was too high by half, and the United States Agriculture Department subsequently issued an estimate of only one end a half million bags lost.
Coffee prices have come back down in the past week and market experts think coffee next year will not be much more expensive than this year.