As the coffee harvest begins, Brazilian officials believe that the impact of the worst drought the country has seen in 50 years will not affect production as much as originally forecast. Brazil’s forecasting agency, Conab, estimated in January that this year’s coffee production would total between 46.5 million and 50.2 million bags, however the agency lowered their estimate last month to 44.6 million bags. But after rains last month officials may revise this number upward by the end of harvest. Drought and higher temperatures in coffee growing regions of the country are estimated to cut Arabica bean production by 16% to 32.2 million bags from 38.3 million bags in 2013. The reduced production has caused a 55% jump in prices this year, and if prices spike significantly, Brazil’s Minister Geller states that there is authorization for an auction of coffee stockpiles to avoid inflationary pressures.
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