Regions of Brazil endured the roughest drought in several years, which likely damaged coffee plants and cut down their productivity by about 18 percent, states a Tuesday report authored by a division of commodity trader ED&F Man Holdings Ltd. that prompted the soft commodity to increase by as much as 8.3 percent on Tuesday.
"People are realizing every day that there's damage, and that the losses will be hard to quantify," senior vice president Hernando de la Roche with INTL FCStone in Miami told the news source on Wednesday. "Traders are jittery because of the uncertainty about the Brazilian harvest and what it would mean to world supplies."
At 9:19 a.m. on Wednesday, coffee futures rose 0.56 percent, a 0.012-cent rise to $2.146 per pound.
The Wall Street Journal reports the South American nation generates roughly 33 percent of the globe's supply of coffee. Brazil also generates more than 50 percent of the world's Arabica coffee beans.
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