Brazil's Robusta coffee industry is laying off people who transport, process and work in warehouses, which have been left largely empty by two years of drought that have crippled production in the worst climate change in eight decades, according to industry operators and executives.
Although prices have never been higher, between 427 and 434 reais per bag of conilon – the Robusta variety produced in Brazil –, producers expect another weak harvest in 2017 as they pull out trees ruined by drought.
Considering current prices, Brazil's 2016 Robusta coffee harvest is valued at US$1.2 billion.
Robusta exports have fallen by 90 percent over the past 12 months compared with the previous year, exporters association Cecafe said.
Despite a strong recovery in arabica production due to the return of rains, the 2016 Robusta harvest in Espírito Santo, the main producing state, fell 40 percent to 5.95 million bags, compared to its peak in 2014.
“Warehouses and segments of the coffee industry here are furloughing employees and transferring some to other areas,” said Luis Polese, president of coffee trade association Sindicafé. “Unfortunately, less skilled workers are being laid off.” He could not say how many employees were laid off.
Robusta used to make up about a quarter of Brazil's coffee crop.
Brazil's Robusta coffee exports are almost insignificant compared to Arabica exports. However, following the decline over the past year of Vietnam's Robusta harvest, Brazil's Robusta exports have become more important to global supply.
Source: Reuters
