A wicked cold snap and massive drought in July have devastated Brazil's coffee belt. According to Bloomberg, preliminary reports show the South American country may lose millions of bags of arabica coffee.
A formal damage report of Brazil's coffee belt is due in the coming weeks. The government report is set to show up to ten million bags (each bag weighing 132 pounds) of arabica coffee, or one-third of annual purchases by the U.S. may have been damaged.
The view is part of a government official who asked not to be named because the figures are internal data.
Days after the freak cold snap, we noted how coffee prices were erupting as estimated losses were 1-2 million bags - now the figures are much worse and suggest coffee prices will remain elevated.
It's only a matter of time before coffee inflation, sparked by volatile weather, is passed on to U.S. consumers.