Brazil's top growing regions for coffee, sugar, and oranges are expected to see another round of frost later this week. A cold snap last week sent coffee futures to a seven-year high. Now orange juice futures are skyrocketing.
Brazil is the world's leading orange juice producer. There are concerns about widespread frost Friday and Saturday in the southernmost regions of south Minas Gerais state could damage citrus trees.
Drew Lerner, president of World Weather Inc, told Bloomberg that frost later this week "would damage some trees" in the Minas Gerais state. Below are Friday morning forecast temperatures hovering around freezing.
Widespread frost concerns could tighten supplies and is the reason why orange juice futures are up more than 4.50% Tuesday afternoon, hitting levels not seen since December 2018.
Meanwhile, coffee and sugar futures have moved higher in recent days on the low temperatures. These crops have also been impacted by severe drought.
Another cold snap could easily send orange juice, coffee, and sugar prices higher, adding to the already extreme food prices.