Coffee futures jumped by 7% on Monday, the biggest rise in five weeks on the New York exchange. This increase is due to concerns over potential frost damage to coffee crops in Brazil, the world’s largest producer. Even slight frosts in areas like Cerrado and Alta Mogiana have raised fears of supply problems in an already tight market.
Colder temperatures are expected in southern states like Rio Grande do Sul, Santa Catarina, and Paraná in the coming days. While the main coffee-growing regions might not be hit, market volatility is causing traders to closely watch the weather.
Rain before the frost could cause early flowering, which might not survive without more rain later. This could affect Brazil’s coffee harvest.