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Leaf Rust and Drought Drive Arabica Prices Higher
The price of Arabica coffee beans is twice what it was a year ago. It turns out that both leaf rust and drought drive Arabica prices higher. Both problems also devastate the finances of small coffee farmers. A recent article in the New York Times notes the terrible damage done as a leaf rust fungus cripples coffee production across Central America.
A plant-choking fungus called coffee rust, or la roya, has swept across Central America, withering trees and slashing production everywhere. As exports have plunged over the last two years, the effects have rippled through the local economies.
La roya as it is known in Latin America, was the culprit that devastated coffee plantation on the island of Ceylon (now Sri Lanka) in the mid-19th century and led British planters to switch to tea! The disease spread from the East Indies to South Asia and Africa and eventually arrived in the new world, almost a century later around 1970. It is possible to defeat the disease as we note in our article, Colombian Leaf Rust Resistant Coffee While a plague of coffee leaf rust threatens the livelihoods of coffee growers and workers throughout Central America, in the coffee producing nation of Colombia, the workers at the Cenicafé have found a cure. Cenicafé is a research organization funded by the Colombian Coffee Growers Federation – the folks who bring you Juan Valdez coffee. In the early 1980’s Cenicafé started work on producing a Colombian leaf rust resistant coffee. Today it comes in two varieties, Colombian and Castillo. The first is a cross between an old Colombian variety, Caturra, and a rust-resistant strain from Southeast Asia, the Timor hybrid. Castillo is an offshoot of further cross breeding of the first Colombian leaf rust resistant coffee strain. Replanting with Colombian leaf rust resistant coffee in Colombia has reduced the incidence of leaf rust from 40% to 5% from 2011 to 2013. Until other nations can replant with resistant strains leaf rust, and drought, drive Arabica prices higher.
And Drought in Brazil
Although the effects of La Roya on coffee production in Central America are severe they are not the main reason for higher coffee prices. Brazil produces a third of the coffee consumed in the world. And now coffee prices are double due to the Brazil drought.
Coffee prices have doubled since late last year, and drinkers of the black stuff may soon start to notice. The culprit: a severe drought in Brazil, the origin of roughly a third of the world’s coffee. The dry spell has wreaked havoc on this year’s harvest of Arabica beans, which are used for the vast majority of global coffee production.